Oral Answers to Questions

TREASURY

The Chancellor of the Exchequer was asked—

Money Laundering

Michael Gove: What estimate he has made of the total amount of money laundered through British businesses and by individuals in each year since 1997-98; and if he will make a statement.

Edward Balls: It is estimated that the total quantified organised crime market in the UK is worth about £15 billion a year. As a result of actions taken to counter money laundering, we have seized more than £230 million of assets from criminals over the past three years. Last year we recovered a record £97 million.

Michael Gove: The Minister will be aware that when the Permanent Secretary to the Treasury was giving evidence to the Treasury Committee he confirmed that only £500,000 of suspect terrorist funding had been frozen, but the United States has interdicted 400 times that amount. Why has the Treasury's performance been so poor in that vital regard?

Edward Balls: I am aware of the hon. Gentleman's interest in those matters and I read his very interesting speech in the debate on the Queen's Speech a few weeks ago. It is true that we have frozen 192 accounts with some £500,000 of suspected terrorist funds since 2001. That is less than the US, but more than other G7 members, including Canada, France, Germany and Japan. In addition to that £500,000, a further £460,000 cash has been seized under the Terrorism Act 2000, a further £126,000 of assets has been forfeited by those suspected of being involved in terrorism, and the latest figures show that £1.385 million—which is solely terrorist-related money—has been seized under the Proceeds of Crime Act 2002. Across the piece we have been freezing and seizing assets. We have also been acting to ensure that we crack down on terrorist networks. I know that the hon. Gentleman has a great interest in those matters and I believe, as he does, that we should try to achieve a consensus across both sides of the House on the many actions that we are taking to deal with that important issue.

Jim Cousins: Are there not matters that are not only abused by terrorists but by others, which lead to considerable tax losses? Those matters include the abuse of remittances; the abuse of taxed resident status; the shunting of private equity capital between tax jurisdictions; the abuse of trust services; and the failure to register trust service providers. Those issues have been on the agenda for some time and more tightening up is required.

Edward Balls: My hon. Friend is right to say that we need to tighten up even further and we are doing so. We have just completed a consultation into how we may strengthen the regulation of bureaux de change and the money services businesses so that we can deal with precisely the issues that he raises. In the past three years there has been a 46 per cent. rise in prosecutions for money laundering through those money services businesses and he is right to say that we need to act. We need to strengthen regulation and, following our consultation, we will have a consensus with the industry on tougher action to deal with those issues.

Peter Tapsell: Will the Treasury bear in mind the fact that, without expert supervision at all times, casinos can be used by criminals to launder money. Criminals are believed to do so in many parts of the world, so why are we bringing super-casinos to Britain?

Edward Balls: The hon. Gentleman is quite right: we need to ensure that we get the regulation of that area right, as in all other areas. We have been consulting on how to implement the third money laundering directive to provide a better and more risk-based approach to the regulation of the casino industry. It is an important industry that creates jobs, but we must ensure that it is properly regulated and that is what we will do.

Hugh Bayley: The UK joint money laundering steering group's guidance notes acknowledge that misuse of corporate entities is the most likely vehicle for money laundering. When in July the Treasury published its consultation paper on the measures that are necessary to comply with the EU's third money laundering directive, the proposals were seriously criticised by non-governmental organisations such as Transparency International because they would not monitor trust and company service providers tightly enough to avoid such misuse. Can my hon. Friend reassure the House that he will introduce proposals for legislation shortly that will include tough monitoring of company service providers?

Edward Balls: I can assure my hon. Friend that we have indeed been toughening up the guidance. We have also been consulting on how we implement the directive. I believe that we will have a consensus on the way forward on money laundering and I will take seriously the points that he makes. We have not only strengthened our rules and regulations on the important issue of money laundering over the past year, but have taken action that has involved 13,000 different financial investigations by the police in the past two years alone. We are acting and ensuring that we have the best approach to regulation of that area, and I take seriously the points that my hon. Friend makes.

George Osborne: In last year's pre-Budget report, the Chancellor promised a comprehensive progress report on countering money laundering and terrorist finance in the spring. It is now winter: where is the report, and why is it more than six months late?

Edward Balls: As the hon. Gentleman knows, we have produced report after report on these matters all year. We produced new guidance on countering money laundering in February, and will produce Sir Stephen Lander's Serious Organised Crime Agency report in the spring. In addition, we produced a consultation document on money laundering in July, and we made an economic statement to the House in October in which we outlined all the measures that we are taking. Those measures include two new orders and new powers to deal with benefits paid to the households involved. We have taken action month by month, and we are working very closely with the security services and the police to make sure that we have the best regime. As I said a month ago, we will produce a report around the end of the year that will bring together everything that we are doing.
	I advise the hon. Member for Tatton (Mr. Osborne) and his colleagues that they would do much better if they took this matter seriously and tried to build a consensus about the ways forward and the measures that we are taking. I should be very happy to meet him and the hon. Member for Chipping Barnet (Mrs. Villiers)—if she can fit it into her diary—so that we can discuss these matters.

George Osborne: I very much look forward to that meeting, when we can discuss Oxford days. When the Economic Secretary publishes the review to which he referred, will he learn lessons from the Treasury's past mistakes? The Treasury's permanent secretary has confirmed that when steps were taken to freeze terrorist funds in 2001 a loophole was left open that allowed terrorist assets to go on being transferred. The Treasury closed the loophole only two months ago, when news broke that Abu Hamza was playing the property market from his prison cell. Why did the Treasury not spot that glaring error for five years, when it is clear that Abu Hamza was able to spot it? Why do the Chancellor's claims on security fall apart on closer examination, just like his claims on the economy?

Edward Balls: I shall be very happy to have a serious meeting to discuss these serious matters. We discussed them at last month's Treasury questions, and I wrote to the shadow Chief Secretary to the Treasury to offer her a meeting, but unfortunately she had to cancel. The meeting is being rearranged, and when we get together we can discuss the details.
	In the meantime, I advise the shadow Chancellor to stop repeating statements that are factually incorrect. The police and security services advise us on these matters, which they looked at in 2005. They submitted a report, and I can tell the hon. Gentleman that there was no illegal transaction at all that involved Abu Hamza. As I said, I shall be happy to discuss these matters with the hon. Member for Chipping Barnet when she can fit a meeting in. In my letter to her I said that there was no evidence that Abu Hamza bought any properties while he was subject to an asset freeze or in prison. Moreover, there is no evidence that the financial sanctions against him were breached, or that funds from the sale or use of properties had been diverted to him or to terrorism.
	I advise the shadow Chief Secretary and the shadow Chancellor to look at the details of the matter and listen to the advice of the police and security services, as the Government do. When we have the meeting that we are arranging, I will be able to discuss these matters in detail and seriously—if that is possible with the hon. Gentleman. Then we may be able to put an end to false and erroneous statements that undermine the national interest.

PFI Projects

David Taylor: What recent representations he has received on the National Audit Office's access to the accounts of companies involved in private finance initiative projects.

Stephen Timms: The most recent representation was in the Hansard Society report in July. Last December, we introduced an addition to the standard PFI contract that gives the NAO access, within reason, to all such documentation and requires contractors to agree up front that they will disclose publicly all but the most commercially sensitive information.

David Taylor: As both a Labour MP and a public sector accountant, I am politically delighted with the huge health infrastructural investment, but professionally disappointed that much of it has been rooted in PFI, whose spiralling costs and deepening inflexibility are aggravating NHS budgetary difficulties. Therefore much greater NAO access to PFI company accounts is urgently needed to expose their worrying lack of probity, efficiency and accountability. However, does the Chief Secretary believe that the incoming Prime Minister next summer will get a grip of the Treasury policy shapers, whose ardent love affair with private sector finance has stored up such serious problems for his future Administration?

Stephen Timms: The PFI has made an important, albeit minority, contribution to the big boost in public sector investment of the past few years. I agree that better transparency and accountability improve management and performance, and we have made much headway in that direction. However, it is very important to maintain the programme so that the progress that has been made with new hospital building, new schools and other public sector investment can continue to go from strength to strength.

Peter Bottomley: Is it now Treasury policy, agreed with the Office for National Statistics, that PFI investment in hospitals is public sector investment, not private sector investment? Will the Minister say whether the National Audit Office is told each time that a hospital PFI contract is doubled in length from 30 years to 60 years because the original terms are too generous? Is that information normally given to the NAO and is it usually approved by the Treasury?

Stephen Timms: I welcome the hon. Gentleman's contribution. Thanks to freedom of information, the Department of Health places on its website detailed information on the profitability of each PFI contract. On the specific point, I did not quite grasp the question that he asked about the NAO information. I will gladly come back to him on that.

Angela Eagle: Will my right hon. Friend accept congratulations from many of the people in my constituency, whose children are now being taught in the seven new PFI-built schools? Those schools had been on the books to be built for years and years, but never appeared until this Government took office.

Stephen Timms: I gladly accept that point and I thank my hon. Friend for it. She will have heard the announcement that my right hon. Friend the Chancellor made yesterday about £36 billion of investment in education over the next four years, to ensure that many more children and communities around the country benefit in the way that her constituents already have.

Brooks Newmark: Several years ago the Chancellor called PFI
	"a cynical distortion of public finance".
	Does the Minister agree with him?

Stephen Timms: Of course, under the Conservative Government there were serious problems with PFI.  [ Interruption. ] Absolutely. Not least of those problems was the fact that they could not make it work. For years under the Conservative Government we were waiting for the programme even to start. Under this Government, however, we have seen the problem solved and impressive and important progress.

Theresa Villiers: Sir John Bourn, the head of the National Audit Office, told the Public Accounts Committee in February this year that too many PFI schemes were off balance sheet, even where the majority of risk was borne by the public sector, not the private sector. Given that the Chancellor told us yesterday that he plans to borrow about £167 billion, if Labour stays in power over the next five years, is it not time that we had an honest appraisal of the true state of the nation's balance sheet, including the £48.4 billion cost of PFI?

Stephen Timms: The hon. Lady should tell the House whether she is in favour or against the big programme of public investment that the PFI initiative has provided the country with. We have provided full information about the scale of the liabilities and the extent of the programme, and we will continue to do so.

Lyons Review

Joan Walley: What discussions he has had with the Office of Government Commerce on the measurement of the wider social and economic benefits of departmental relocations under the Lyons review.

Gordon Brown: I can announce that, since the Lyons report recommended 20,000 civil service relocations by 2010, 10,179 posts have already been announced for relocation. Some 1,200 of those posts are in the east and west midlands. The Lyons review presented evidence that movement of posts would offer positive economic and social benefits for the receiving destination. That is now the subject of a review that will be published in the new year.

Joan Walley: I thank my right hon. Friend for that reply. May I remind him of our objective in north Staffordshire and Stoke-on-Trent of getting jobs relocated there from the Government estate? Given the information in yesterday's pre-Budget report that more than half of the jobs to be relocated have now been relocated, will he look closely at the guidance from the Office of Government Commerce and, in particular, the e-PIMS mapping system, which tends to highlight areas that already have parts of the Government estate? In Stoke-on-Trent, we do not have that Government estate and we desperately need the Chancellor to recognise the social and economic case for relocation of jobs to our area.

Gordon Brown: I will look at that. When my hon. Friend asked me a question yesterday about the textiles and other industries—the pottery industry—in her area, I said that we would hold a meeting with her and other local MPs. The fact is that some of the 1,200 jobs relocated to the midlands have been relocated to her constituency—from the Department for Environment, Food and Rural Affairs and from Her Majesty's Revenue and Customs. However, I appreciate that, although unemployment has fallen substantially in her constituency since 1997, from 1,880 to 1,326, jobs need to be created for the future. That is why we will also look carefully at how local enterprise grants can go to her constituency in future.

Philip Dunne: Yesterday, the Chancellor recycled announcements and fiddled his fiscal rules. Has he given Sir Michael Lyons the same misleading information as he gave the public last month about increases in central Government grant for next year's local finance settlement? In south Shropshire in my constituency, the public were told that the Chancellor was increasing that grant by 5.9 per cent., but it ended up being 3.4 per cent.

Gordon Brown: I see that the hon. Gentleman has asked not about relocation of jobs to his constituency, but about Government grants. I think he will agree that Government grants to local authorities have gone up every year, continue to go up this year and will go up next year, which is a very different situation from what happened under the Conservative Government.

Barry Sheerman: My right hon. Friend should be congratulated on the progress of relocation of jobs and administrative centres since the Lyons review, but does he agree that many other bodies that receive Government money could also be relocated in other more deserving areas?

Gordon Brown: That is exactly what we are looking at. My hon. Friend may be interested to know that the Training and Development Agency is moving to Manchester, the Qualifications and Curriculum Authority to Coventry and the Standards Board to the north-west; and that there are other relocations right across the whole of the UK. We will continue to look further into relocations—first because we believe that they are about best value for money and, secondly, because we believe that they can be of great benefit to constituencies and regions like my hon. Friend's, where there is a continuing need to create more jobs for the future.

Mark Francois: The relocation of civil servants raises issues about lack of geographical coverage: for instance, HMRC will now apparently be fighting fraud in London with a team based in Portsmouth. What does the Chancellor say to Mr. Clive Murray, who has 16 years experience as an HMRC compliance officer and who wrote to me last month about the centralisation of anti-fraud teams to ask how
	"somehow or other overworked staff in Portsmouth will be able to find crooks throughout London and the South East by purely technological means unknown to them before"?
	How is the Clunking Fist going to make that work?

Gordon Brown: We have created the most modern system of investigating fraud and I think that the hon. Gentleman will agree that the changes in HMRC and more generally in our approach to dealing with criminal fraud have been major and substantial. I do not quite understand the hon. Gentleman's point when he says that relocation has been unbalanced throughout the whole of the UK. Relocations are also taking place in the south-east region, from the centre of London to some of the south-east's higher unemployment areas. The House should know that, so far as the 10,000 reallocated jobs are concerned, 2,000 went to Yorkshire, about 1,000 to the midlands, 2,500 to Wales, 693 to the south-west, and the east of England and the north-east have also received some relocations. It is important to correct the misrepresentation, as these relocations are taking place right across the UK.

Brian H Donohoe: The Chancellor will be aware that unemployment in my constituency has dropped since 1997 and that it continues to drop, even since last month's announcement. Will my right hon. Friend tell me how I should campaign to get some of the relocated jobs into my constituency?

Gordon Brown: I am grateful to my hon. Friend, who has fought for jobs in his constituency. He is right that, as a result of the new deal and other Government initiatives, unemployment in his constituency is lower now than it was in 1997. A report will be published soon on the economic and social benefits of relocation. I suggest that, following that, we have a meeting to look into how jobs can be relocated to new areas that have not yet benefited from the relocation policy.

Banking and Lending Services

Natascha Engel: What steps he is taking to ensure that benefit claimants and people on low incomes have ready access to regulated banking and loans services.

Edward Balls: The Government's goal is to halve the number of people without access to a bank account. We have established a £120 million financial inclusion fund and an independent financial inclusion taskforce, which has recently reported to me that we are making good progress towards that goal. I can tell the House today that we have appointed two new members of the taskforce: Bridget McIntyre, the UK chief executive of Royal and Sun Alliance, and Danielle Walker Palmour, director of the Friends Provident Foundation.

Natascha Engel: The Farepak disaster has thrown a spotlight on the financial barriers and debt burdens faced by the poorest people in this country. How is the Treasury using this opportunity to promote the good work of organisations like credit unions and to warn against loan sharks and doorstep lenders?

Edward Balls: My hon. Friend is quite right to highlight the important role that credit unions can play. It is important that we crack down on loan sharks as we learn lessons from the terrible Farepak debacle. As she knows, we are putting £36 million into supporting credit unions for low-income lending. In addition, there are two pilot schemes—one of which I visited in Birmingham last Friday—for cracking down on illegal loan sharks. Over the past year or two, the Birmingham team has helped 1,000 victims and wiped out more than £1 million worth of debt. A team in Glasgow is doing the same work. We have put £1.2 million aside to continue those pilots for a further year and to extend them to Sheffield, Liverpool and west Yorkshire. The Government are determined to crack down on loan sharks and to make available the resources to do so.

Nicholas Winterton: I fully support the hon. Member for North-East Derbyshire (Natascha Engel), who put an important question, but in addition to ensuring that people on low incomes have access to resources should not the Government be doing more to prevent the financial services industry, particularly banks and credit card companies, from bombarding people to borrow money for irresponsible purposes? Can we do more to regulate those organisations to prevent them from tempting people on low incomes?

Edward Balls: As the hon. Gentleman knows, the Office of Fair Trading is responsible for such regulation. As a result of the Farepak problems, a review of the regulatory framework of such schemes is under way. The Department of Trade and Industry is also holding an investigation into the particulars of the case. In addition, we at the Treasury have asked Brian Pomeroy to carry out a review for us of the debt implications of hamper schemes and savings clubs. I have asked him to look into who uses hamper schemes, which are often poor value for money, why they opt for such schemes rather than mainstream financial services products, and in the light of that, to consider whether the savings needs and debts of those groups can be better met by mainstream financial services providers; and to consider what we can do to promote consumer awareness in that area. I hope that the hon. Gentleman can see that we are acting to try to make sure that we learn the right lessons from the problems of recent weeks.

John McFall: As the Minister is aware, the Treasury Committee has recently produced three reports on financial inclusion and I thank him for his ready co-operation with us. The main conclusion of those reports is that the poor pay more for their credit, and as 3 million people still have no access whatever to bank accounts there is still a mountain to climb. The Committee looked at one good aspect—the savings gateway, which, with matched pound for pound contributions from the Government, helps people on low incomes who do not benefit from tax relief. Will my hon. Friend ensure that the savings gateway pilot is encouraged throughout the country to help people on low incomes to save?

Edward Balls: I am grateful to my right hon. Friend; he and his Committee have played an important leadership role on those matters in recent months and we are studying his report in detail. He raises some particular issues about cheque clearing and generic advice, on which we are already acting. I hope that the review that I have asked Brian Pomeroy to carry out will tell us precisely what more we need to do to make sure that our savings mechanisms for low-income savers work well. I very much look forward to the report the Committee will soon produce on access to automated teller machines in low income areas. I know that my right hon. Friend has done important work on that subject and I hope that we shall be able to welcome the conclusions of the report. I can assure him that we are giving close consideration to all the issues he raises in his reports and we shall respond in the new year.

Red Diesel

Alistair Carmichael: What recent progress has been made in negotiations to extend the derogation from EU regulations to enable UK pleasure boats to use red diesel in 2007; and if he will make a statement.

John Healey: I know that the derogation that permits the use of red diesel in Britain is highly valued by private boat owners and users. Thirty-four separate derogations from the directive are held by member states. None has yet been approved by the Commission and 14 have been rejected so far. Late yesterday afternoon, it was confirmed to me that the Commission had decided not to renew the UK's application for a fresh derogation for private boats. I know that will be unwelcome news. As we have argued to the Commission, it could be highly complex and costly to implement the measure, so today I asked officials to meet concerned and affected organisations soon to discuss the implications of the Commission's decision.

Alistair Carmichael: I thank the Minister for that answer, and he is right that the terms of the Commission's communication to the Council of the European Union are disappointing. Is he telling the House that that communication effectively kills the application for the derogation, as it is, of course, a communication to the Council? What can we do to ensure that the necessary pumps and facilities will be put in place in every marina and pier that will require them before 1 January? I have pursued the Minister on that point for a number of years. The issue could have been dealt with much more quickly and much sooner, if he had had the backbone to deal with it.

John Healey: We put the strongest possible case to the Commission, and we prepared that case in close co-operation with, and with contributions from, many of the organisations affected. We could have done little more to press the case. I have personally spoken with and written to the Commissioner on the issue, but there is no further stage in the process. First, we need to discuss the implications of the Commission's decisions. Secondly, we will consult widely on implementing the directive. Thirdly, we will have to legislate, and implement the changes. I made it clear to the Commissioner that it is important to allow the UK a suitable period in which to translate the Commission's decision into the implementation of the changes required. The Commissioner acknowledged that point, and we will work with the boating associations on that in the coming months.

Rob Marris: The derogation relates to pleasure boats, but not working boats. Can my hon. Friend tell me how much tax revenue is forgone each year because of the red diesel tax concession for those engaging in aquatic leisure pursuits?

Hon. Members: Answer!

John Healey: It is fair to say that my hon. Friend has not been one of the strongest proponents for continuing the derogation. He is right that the derogation applies to private boat owners. Commercial boat owners and commercial interests will continue to benefit from reduced rates of duty on fuel. The revenue that we expect to gain if we are forced to implement the three derogations that we currently hold—and we have applied to the Commission for their renewal—totals about £10 million. The revenue gain is totally out of proportion to the cost of implementation, the complexity that may result for the industry, and the disadvantage to users. That was the core of the case that we put to the Commission, and I am disappointed that it rejected continuing the derogation for private boat owners.

Robert Goodwill: The decision will be met with great dismay in marinas in ports such as Scarborough and Whitby. Does the case not expose the myth of the UK veto on taxation matters? A stealth tax is being imposed on us by the European Commission, against the wishes and the request of the British Government. Who runs Britain?

John Healey: I know the hon. Gentleman's constituency well and I recognise the concern that will be felt in Scarborough and Whitby. However, I must point out to him the source of the derogation. The principle that road fuel level duty should be applied to private boat owners was agreed not in 2003 under the energy products directive, but in 1992 under the mineral oil structures directive, by the previous Government.

Brian Jenkins: I am sure that my hon. Friend will know that, as has been stated, the new regulation will be impossible to police, and it will add a further burden to our law enforcement agencies. However, is it not about time that we woke up to the fact that red diesel is outdated? It is just as polluting and bad for our environment as ordinary diesel. Should we not work towards cutting out red diesel? To meet the costs that that would mean for the industry and users, we could come to some tax arrangements that would allow us to phase in that change over the next decade.

John Healey: My hon. Friend is right that, in some respects, red diesel is more polluting than mainstream fuels. He will have noted that, yesterday, my right hon. Friend the Chancellor announced a special duty rate in the pre-Budget report to encourage rail operators to use biofuels mixed with red diesel to reduce the environmental impact. Red diesel is valuable to many commercial sectors that have been given permission to use it. The consequences of moving away from red diesel would be profound, but in the case of the derogation that we are considering this morning, its environmental impact is negligible, which was part of our case to the Commission for retaining it.

BBC Licence Fee

John Grogan: What recent discussions he has had with the Office for National Statistics on whether the BBC licence fee should be treated as a tax.

John Healey: There have not been any discussions between Treasury Ministers and the Office for National Statistics on the reclassification of the BBC licence fee, which is a matter solely for the national statistician, not for Ministers. It has been done solely for the purposes of compiling the national accounts, and it has been done consistent with national guidelines.

John Grogan: Given that the Chancellor is one of the strongest advocates of modern British values, does my hon. Friend share my hope that, after careful scrutiny, he will decide to back one of the most trusted British brands—the BBC—and agree an adequate increase in the licence fee to allow a successful digital switchover, a move in production to Manchester and more quality programming, even if that annoys Mr. R. Murdoch, who would love to see a cash-strapped BBC and who opposes Government plans for a digital switchover.

John Healey: As chair of the all-party BBC group, I accept that my hon. Friend is more interested in the size of the licence fee than its statistical classification. However, he follows these things closely, so he knows that the licence fee has risen by 15 per cent. above inflation since 1997. He knows, too, that the BBC's income has risen above that because of the growth in the number of households and improved clamping-down on evasion of the licence fee. We can settle the new licence fee for the next period at a level that is fair to the BBC and to the licence fee payer, and that allows the BBC to lead and fund the digital switchover, while making sure that it is available to everyone in the country.

Anne McIntosh: In the absence of the chairman, with whom will the Government discuss the future of the BBC licence fee?

John Healey: The deputy chairman is acting as chairman pro tem, and we will hold discussions as appropriate. We will hold them with the new chairman when one is appointed.

Ian Lucas: Does my hon. Friend support access to the licence fee for the community radio fund, so that in areas such as Wrexham, where the BBC refuses to provide a local radio station, the community radio station that will begin broadcasting in the new year will have access to public funding?

John Healey: We are considering all the relevant matters in decisions on the licence fee for the future period. We will make an announcement as soon as we can, when the work is completed.

Unemployment

Peter Bone: What steps he is taking to tackle unemployment; and if he will make a statement.

Gordon Brown: I announced yesterday new measures to help lone parents and the young unemployed into work. Since 1997, 900,000 lone parents have benefited from the new deal, and 122,000 disabled men and women have found jobs. We have helped 316,000 young people and 283,000 of the long-term unemployed, which is one reason why there are now 2.5 million more people in work than in 1997. The answer is not to abolish the new deal but to extend it into a new deal for jobs and skills.

Peter Bone: Last year, unemployment increased in 527 constituencies across the United Kingdom. In Wellingborough, unemployment increased by 17.6 per cent. There are, and I have checked my figures, more people unemployed in Wellingborough today than there were nine years ago. Is this "here today, gone tomorrow" Chancellor proud of that record?

Gordon Brown: I know more about Wellingborough than almost any other constituency in the country. The claimant count is down from 1,856 in May 1997 to 1,535 now. Youth unemployment in the hon. Gentleman's constituency is down by 47 per cent. since 1997, and adult unemployment is down by 71 per cent. The count on employment shows that not a few hundred but several thousand new jobs have been created in his constituency since the last election.
	I hope that the hon. Gentleman is more serious about creating jobs in the future. On April 15 2005, he said this in the  Northamptonshire Evening Telegraph, "We want to get rid of red tape, but if that means unemployment, I am sorry, they will get another job. We are not here to create jobs." I hope that he will support us on the new deal.

Dennis Skinner: Does the Chancellor agree that as a result of the coalfield plan, we have made progress in coal-mining areas throughout Britain? I have spoken in many of those areas, where there have been 40 to 50 per cent. reductions in unemployment—at one time, many of those pit villages experienced unemployment of 15 per cent., and in some cases the figure reached 20 per cent. We will need a little bit more money for junction 29A, which goes straight into Markham pit yard. That is where we are going to get rid of all the pit tips and the lines of coke, which will be replaced by industrial premises and 5,000 jobs. Give us the extra money.

Gordon Brown: My hon. Friend has outlined the high road to employment. Looking at every region of the United Kingdom since 1997, there are 160,000 new jobs in the west midlands, 200,000 new jobs in the east midlands, 200,000 new jobs in Scotland and 200,000 new jobs in Yorkshire and Humberside. The one thing that the Opposition cannot say is that the 2.5 million new jobs that have been created in Britain in the past 10 years is not a record for this country. There is a higher proportion of people in work in this country than in most of the other advanced industrial economies. The Opposition should support the new deal, rather than trying to abolish it.

Greg Clark: According to the Joseph Rowntree Foundation this week, unemployment among adults under 25 has never fallen below 10 per cent. since the Chancellor came into office, is three times greater than for adults over 25 and is now rising. Does the Chancellor agree with the Joseph Rowntree Foundation? Will he accept that that is a problem? And why does he think that policy has so far failed that group of people?

Gordon Brown: The hon. Gentleman might also have said that unemployment has fallen in his constituency by 54 per cent. since 1997 and that it has fallen for the young people that he is talking about. It is important that the House knows the employment figures on 18 to 24-year-olds since 1997, despite what the Opposition say. There were 3,230,000 young people in work in 1997; by 2006, the figure was 3,600,000, which is an increase of more than 300,000.

Kerry McCarthy: I recently paid another visit to the Single Parent Action Network, which has its national headquarters in my constituency. It has just received nearly £400,000 in lottery grant to expand its study centre work. Does my right hon. Friend agree that sometimes it is important that single parents have a year or two to gain qualifications, so that when they enter the job market they can go for better-skilled, better-paid jobs, rather than entering work straight away? And will he tell me what the Government are doing to support that?

Gordon Brown: One of the great changes that has taken place since 1997 is that the number of single parents entering work has risen substantially. When we came into power, the figure was about 43 per cent., and it has now risen to nearly 58 per cent.—we are on the road to raising it to around 70 per cent. in this country. One of the reasons why we have been able to make that change is by providing training support and child care help to lone parents to enable them to make those decisions. In particular, we have been able to help those people with the sort of courses recommended by my hon. Friend. Again, that part of the new deal is essential to the creation of jobs. I wish that there were all-party support for the new deal, instead of the Opposition parties trying to abolish it.

Vincent Cable: In the light of research that every 10 per cent. increase in unemployment results in a 30 per cent. increase in home repossessions, will the Chancellor call in the banks to negotiate a code of conduct with them to ensure that job losses do not lead to the loss of homes? In that context, can he confirm an alarming fact on page 224 of the Red Book, where the Government appear to project that claimant count unemployment will rise to more than 1 million in 2007-08? Is that correct?

Gordon Brown: No, because we do not make projections about the claimant count. I have to tell the hon. Gentleman that historically no Government have predicted what unemployment will be in a year's time. I have to tell him also that in 1997 unemployment was 1.6 million and that since then it has fallen by 700,000 to 900,000. That is an achievement in itself.
	As for mortgages, the hon. Gentleman will probably remember that 1.5 million people were in negative equity at the beginning of the 1990s. It is because interest rates remain low that so few people, in comparison with that figure, are in negative equity and that there are now so many fewer repossessions. I hope that he will support an economic policy, contrary to the one that he represents at the moment, that will ensure economic stability through low inflation and low interest rates.

George Mudie: Unemployment in my constituency halved in the first four years of this Government, but sadly it plateaued, and in the past year it has increased by almost 22 per cent. and is now 7.7 per cent.—more than double the national average. Can the Chancellor tell me what fresh initiatives in the pre-Budget report will bring some hope to my constituents?

Gordon Brown: As my hon. Friend knows, unemployment in his constituency is still very much below what it was in 1997, as a result of the new deal. Yesterday we announced more help for single parents and the young unemployed to get into work. We will carefully consider, area by area, whether in local employment offices or in the regions, what local discretion can be exercised to allow jobcentres to enable jobs to be created in those areas. We are determined to get more people into jobs. My hon. Friend must recognise that there are now 2.5 million more people in work than there were in 1997 and that the percentage of the adult population in work—75 per cent.—is higher than in most countries. We will continue to create jobs, but we will need the new deal to do that, not its abolition.

Paul Goodman: Can the Chancellor confirm the simple but little-known claim that unemployment among young men in Britain is now the highest in the whole developed world? A yes or a no will do.

Gordon Brown: It is completely untrue. Unemployment among young people in France is nearly 20 per cent. [Hon. Members: "Young men."] I said that unemployment among young people in France is about 20 per cent. If the hon. Gentleman were to look at the figures for France and for many other industrialised countries, he would also be in a position to know that in his constituency unemployment is down by 25 per cent. since 1997. I hope that the Opposition will start to think about their policy. If they seriously want to get more young men and young women into work, how can they possibly support the abolition of all the measures that are necessary to get people into work? Instead of attacking the unemployed, they should be attacking unemployment.

Gershon Target

Tom Brake: What progress has been made towards the Gershon efficiency savings target; and if he will make a statement.

Andrew Gwynne: What progress has been made towards the Government's Gershon efficiency programme targets.

Stephen Timms: As we set out in the pre-Budget report, at the September halfway point in the three-year Gershon efficiency programme, Departments and local authorities had reported annual efficiency gains amounting to £13.3 billion-worth of the £21 billion target.

Tom Brake: To corroborate the figure that the Minister quoted, would he be willing to publish an independently audited report setting out the savings by Department and by programme? Could he give the House information about the five biggest savings that have been identified as part of the Gershon programme?

Stephen Timms: The departmental figures will be in the departmental autumn reports. There has been a lot of scrutiny of this programme by the National Audit Office—that has been welcome—which said that the programme has been more systematic than previous attempts. It made several observations when it reported in February and since then, we have been working with it to ensure that the numbers are more robust. I think that it will report again early in the new year, and I look forward to hearing what it has to say.
	On additional numbers, I can tell the hon. Gentleman that of the £13.3 billion-worth of overall savings, £5.5 billion came from procurement, £2.4 billion came from productive time, and £1.5 billion came from policy funding and regulation. I agree that it is important that we provide full information on the programme, because the more transparency there is, the better the chances of success.

Andrew Gwynne: Does my right hon. Friend agree that it is right, when possible, to make savings in bureaucracy and the administrative function of Government in order to move resources to front-line public services such as policing, schools and hospitals? In doing that, will he reject outright any proposals that the Treasury may have received to reduce overall public expenditure, as the Conservative party proposes?

Stephen Timms: I completely agree. My hon. Friend heard my right hon. Friend the Chancellor announce yesterday that each Department will be required to reduce its spending on administration by 5 per cent. year on year throughout the comprehensive spending review. I also agree with my hon. Friend about the way in which the freed-up resources should be used. We shall certainly reject proposals for £20 billion-worth of tax cuts in the Tory tax report, the £40 billion in tax cuts that the Cornerstone group proposes or the £50 billion in tax cuts that the No Turning Back group proposes. The priority needs to be to equip Britain for the future.

Hywel Williams: Why are valuable jobs being cut in Revenue offices in objective 1 areas—which are, by definition, deprived—in Wales? At the same time, jobs are being moved to Cardiff, Swansea and Wrexham, which are prosperous areas where the labour market is tight. What is the sense of that?

Stephen Timms: I remind the hon. Gentleman that there are 100,000 more jobs in Wales since 1997. It is important to deliver public services as efficiently as possible in Wales as elsewhere. We are relocating jobs through the Gershon programme and the Lyons recommendations to Wales as to every other part of the country. However, it is vital that we deliver services as efficiently as possible.

Julie Kirkbride: Given that yesterday the Chancellor set out massively increased borrowing requirements for the Government over the next five years, has the Gershon report failed to achieve savings or is it some other failure by the Treasury that requires every family in the UK to borrow an extra £10,000 in the next five years to support the Government's public spending programme?

Stephen Timms: We will meet our fiscal rules over the cycle. We do not support a third fiscal rule, as the hon. Lady may. However, the Gershon programme is delivering the savings that it was designed to produce—£21 billion in the current spending review period. Yesterday, we set out an ambition to release £26 billion over the three years of the comprehensive spending review, thus making a big contribution to value for money for taxpayers.

Millennium Development Goal

Mary Creagh: What progress is being made towards the millennium development goal of education for every child; what financial contribution the UK will make to meeting that target; and if he will make a statement.

Gordon Brown: The United Kingdom is committed to spending at least £8.5 billion on aid for education over the next 10 years. We are entering into 10-year agreements to help finance poor countries' education plans and we have called an international donors' conference on education for early 2007.

Mary Creagh: I thank my right hon. Friend for that reply and for his commitment and leadership in achieving that specific millennium development goal. Research by Save the Children shows that half the 77 million children who are currently not in education live in conflict zones. The pigmy villagers that I met in Bukavu in the Democratic Republic of the Congo earlier this year were desperate for their children to receive an education. Will my right hon. Friend ensure that half of all education spending for reaching the millennium development goal goes to children in conflict-affected fragile states? It is so important to offer children, especially those who have been in militias, an alternative.

Gordon Brown: My hon. Friend is absolutely right. The latest figures show that 39 million children—half of the world's children who do not go to primary school—live in fragile, conflict-afflicted states. That is a particular problem where traditional and conventional systems of education do not provide for those young children. Something must be done in those places. The Red Cross and Médecins sans Frontières deliver health care behind conflict lines. It is now important to consider whether we could establish an organisation to help deliver educational services to young children, even in broken-down states and those where there are conflicts. I look forward to working with our international partners and the World Bank on that. Perhaps a fast-track initiative can help provide new opportunities for children who are otherwise the victims of not only conflict but illiteracy and poverty.

John Bercow: Given that Ghana, Kenya and Tanzania have all scrapped school fees in recent years and subsequently enjoyed a dramatic rise in pupil attendance, does the Chancellor agree that, when providing funds to meet the millennium development goal on primary education, he should ask for explicit commitments from recipient Governments that they will abandon policies that restrict access and adopt policies that promote it?

Gordon Brown: I am grateful to the hon. Gentleman for asking that question, because it allows me to say that the support that we are giving is for free primary education. When we sign agreements that give countries long-term funding, it enables them to make the long-term decision that, whatever is happening from year to year, they will be able to fund education free of charge over the long term. When I was in Kenya, I heard that, in the week in which it made education free for primary school children, 1 million children turned up to be registered for school. They had been denied that education for years—or all their lives, in most cases—and now they were able to go to school free of charge. We will continue to push for free education as part of these plans, and I hope that we can persuade other countries that that is an essential element of providing opportunity and an escape from poverty for young people in developing countries.

Judy Mallaber: Yesterday, Joseph Kabila was inaugurated as president of the Congo after its first election in 40 years. During that election, I met women who felt desperate about their own and their children's lack of education. Does my right hon. Friend agree that education is critical if we are to entrench democracy? Will he encourage his fellow Ministers to continue to support, and also pressurise, newly elected Congolese politicians to pursue and tackle issues of good governance, security and the distribution of mining and tax revenues in order to create the conditions in which we can meet this millennium development goal?

Gordon Brown: I know that my hon. Friend has taken a particular interest in the problems of that country, and I hope that, after yesterday's inauguration, things will progress there. We are ready to provide funds for education, and we are working with 17 African countries on 10-year plans for their education. We are also working with Canada, the Netherlands, Sweden and Norway on long-term predictable financing. Now we need to win over all the other members of the G7 to that project; that is the task for next year.

Employment (Scotland)

Ann McKechin: What assessment he has made of levels of employment in Scotland in 2006-07.

Gordon Brown: This year alone, there are 20,000 more people in work in Scotland, and the total increase in employment since 1997 has been 200,000. There are now a record 2.47 million people in work in Scotland.

Ann McKechin: I welcome those figures. My right hon. Friend will be aware that the Scottish National party—whose representative is, surprisingly, no longer in the Chamber—is fixated by the idea that the rise in the growth rate is the only true indicator of Scotland's wealth. Does my right hon. Friend not agree that the way in which we use that growth to create jobs and improve skills is a key component on which the Scots will judge us? Will he give me his assurance that we will prioritise those groups that have still to enter the job market, and introduce real and practical policies that will give them that opportunity?

Gordon Brown: My hon. Friend is absolutely right. Growth in Scotland—like growth in the United Kingdom—has risen faster than in the euro area over the past 10 years, and employment has increased even faster. In her own area of Glasgow, unemployment, which stood at 85,000 at its peak under the Conservative Government, is now 17,000, and long-term and youth unemployment are both down substantially. It is important to point out, given that the SNP is not represented in the Chamber today—even when there is a question on employment in Scotland, its members fail to turn up to debate the issue—that the real future for Scotland is as part of the United Kingdom, where it will benefit from the growth-creating strategies of this Government, the new deal and other employment measures.

David Laws: What forecasts for employment in Scotland has the Chancellor made for 2007-08? Has he now had a chance to read his own Budget Red Book and to reflect on the point made by the Liberal Democrat shadow Chancellor earlier? Will he confirm that my hon. Friend's assumption for unemployment, audited for the National Audit Office, is that it will rise slowly to more than 1 million in that period?

Gordon Brown: Once again, burying himself in the detail, the hon. Gentleman has missed the main point.  [Interruption.] The main point— [Interruption.] The main point—if Opposition Members will listen—is that it is not an assumption by the Government at all. It is not an assumption made by the Government, it is not an assumption compiled by the Government, and it is not an assumption used by the Government. It comes from independent forecasters outside Government, and it is nothing to do with a forecast made by the Government.

Charity Sales (VAT)

Si�n James: What assessment he has made of the merits of removing VAT from goods sold by charities.

Dawn Primarolo: Charities already benefit from VAT zero rating or exemptions on many goods that they supply, donated items and goods sold in connection with fundraising. Total VAT reliefs for charities are worth more than 200 million per year, which forms part of the 2.6 billion in tax reliefs for charities and charitable giving provided each year.

Si�n James: As my right hon. Friend will know, I have represented the concerns of my constituent Catherine Haynes and others about items such as the BBC Children in Need TOGS celebrity calendar and the Janet and John CD. What assurances can she give my constituents that when they buy such charity goods, there will be special VAT arrangements for them in the future?

Dawn Primarolo: I can give the assurance that the available VAT exemptions and zero rates for fundraising sales made by charities are applied as widely as possible under the European Union agreements governing VAT reliefs and exemptions. Very generous gift aid relief means that charities and fundraising organisations such as Children in Need can claim 28p for every pound donated. Last year that meant that the Government paid charities 728 million through gift aid relief.

Business of the House

Theresa May: May I ask the Leader of the House to give us the business for the coming week?

Jack Straw: The business for next week will be as follows:
	Monday 11 decemberSecond Reading of the Offender Management Bill, followed by proceedings on the Consolidated Fund Bill.
	Tuesday 12 DecemberSecond Reading of the Greater London Authority Bill.
	Wednesday 13 DecemberSecond Reading of the Justice and Security (Northern Ireland) Bill.
	Thursday 14 DecemberA debate on fisheries on a motion for the Adjournment of the House.
	Friday 15 DecemberThe House will not be sitting.
	The provisional business for the week commencing 18 December will be as follows:
	Monday 18 DecemberSecond reading of the Digital Switchover (Disclosure of Information) Bill.
	Tuesday 19 DecemberMotion on the Christmas recess Adjournment.

Theresa May: I thank the Leader of the House for giving us the business up to the recess.
	Yesterday, in the United States, the Iraq study group published its report. It is a chilling commentary on the management of the Iraq war and its aftermath. The Prime Minister is in the United States today for talks with President Bush following the report's publication. Undoubtedly those talks will cover not only the report but the response of both Governments to its findings, and proposals for the future of our involvement in Iraq. May we have a statement from the Prime Minister before the recess on the Iraq study group report and future UK involvement in Iraq?
	The Department of Trade and Industry is expected to issue a report on the future of the Post Office next week. It should cover support for rural post offices and the replacement for the Post Office card account. Can the Leader of the House confirm that there will be an oral statement from the Secretary of State for Trade and Industry so that Members can question him on the report? Given that the subject is of great concern to Members in all parts of the House, as Government decisions have led to the closure of many post officesnot just in rural areas, but in urban areas such as Ross road and Woodlands Park in my constituencymay we have a debate on the future of the Post Office in the new year, in Government time?
	The Leader of the House will be aware that new procedures have been introduced for the Committee stages of Bills. The House voted on them only a few weeks ago. Among other things, the new procedures allow Public Bill Committees to take evidence during consideration of Bills. I think that when the Leader of the House said that they would come into force after 1 January, many Members thought that that meant that any Committees sitting after that date would be able to take public evidence. However, I understand that the new procedures will not apply to any Bill introducednot just any that has had its Second Readingbefore 1 January. That means, for example, that the Committee on the Greater London Authority Bill will not be able to take evidence from either the Mayor of London or from London borough council leaders. Is that another sleight of hand by the Government, or will the Leader of the House reconsider, to ensure that the will of the House is put into practice?
	Yesterday the Chancellor gave us the pre-Budget report. There is a pattern to such thingsLabour Members cheer them on the day in the House, and a few days later the Chancellor's promises start to unravel. This one, however, started unravelling as soon as he sat down. Not only did he give us reheated spin on education and fail to mention the crisis in the NHS oncewhich, I presume, means that he supports the cuts in the NHSbut his claim to be addressing green issues struck a false note. Under this Government, carbon emissions have gone up and the burden of green taxes has fallen. The verdict on the Chancellor from Ed Matthews of Friends of the Earth was:
	I would give him probably one out of 10...I think it's pretty feeble really. He's got a terrible record. For 10 years he's failed to provide a green budget.
	Hon. Members may recall that earlier this year, in the Budget, the Chancellor promised
	to radically reform vehicle excise duty...introducing...a zero rate for a small number of cars with the very lowest carbon emissions.[ Official Report, 22 March 2006; Vol. 444, c. 295.]
	As it turned out, no cars eligible for that zero-rated road tax are currently available to buy in Britain.
	Yesterday we heard about zero-carbon homes. The Chancellor announced
	plans to ensure that within 10 years every new home will be a zero-carbon home.[ Official Report, 6 December 2006; Vol. 454, c. 309.]
	Last night on Newsnight, the Chief Secretary to the Treasury said that there were already some zero-carbon homes in the UK. How many are there? He was not quite sure. Where are they? In a development somewhere, he said. What part of the country are they in? He did not know. So

Mr. Speaker: Order. The right hon. Lady must understand that a lot of Members want to speak today. We have two debates to come, and Members will be disappointed if they are not able to participate. Her case about the business of next week must be concise. I do not want a rehash of yesterday's pre-Budget report.

Theresa May: My very next sentence, Mr. Speaker, was to be as follows: can we have a statement from the Chancellor clarifying his policy and explaining how many zero-carbon homes there are, where they are and what exactly qualifies as a zero-carbon home? Alternatively, will we find out that, as with every announcement from the Chancellor, he smiles on the day and people suffer ever after?

Jack Straw: The right hon. Lady asked me first about the Iraq study group's important and timely report. The Prime Minister will give his initial reactions to that at a press conference later today in Washington[Hon. Members: Oh!] Well, that is where he is. Even with his great skills, there is no way that he can suddenly whisk back here to make a statement. On the issue of a statement, it is not usual to make statements on bilateral visits of that kind. There will, of course, be Prime Minister's questions next Wednesday [Interruption.] It will be good enough.
	On the Post Office, my right hon. Friend the Secretary of State for Trade and Industry intends to make an oral statement. As the right hon. Lady is trying to help position her party as an alternative GovernmentI am glad to notice the smirking laughter from the hon. Member for Ribble Valley (Mr. Evans) with regard to that statementlet me say that the idea that the Government are to blame for the closure of post offices is simply incorrect. Post office closures have been caused by technological changes that have led to a catastrophic drop in customers, which would have happened under any Government. What would not have happened under the previous Government, however, is the 2 billion of additional subsidy to help rural post offices in particular, many of which have fewer than 15 to 20 customers a week.
	On Committee stages of Bills, I do not have the exact text of what I said, but I made it clear when introducing the measures that we were putting before the House a plan that the default setting of evidence sessions should apply in respect of Bills that had their Second Reading after 1 January. I am pretty certain that I said to the House that, for that reason, we anticipated that only five Bills or so would have the procedure during the current Session.
	However, on the Greater London Authority Bill and the Offender Management Bill, I undertake, without commitment, to talk to my right hon. Friends who are handling those Bills to see whether they are willing to introduce such sessions. There is no sleight of hand; we proposed the measure to ensure that this change, which is of profound importance to the way in which the House scrutinises Bills, gets properly bedded in.
	Lastly, at some length, the right hon. Lady went on about yesterday's brilliant statement by my right hon. Friend the Chancellor of the Exchequer. The problem that the Conservative party has is that we have had an unparalleled rate of economic success over the last 10 years, which puts into dismal perspective the record of the previous Government. She asks for a statement; we had a statement yesterday.

Theresa May: On zero-carbon homes?

Jack Straw: If the right hon. Lady wants to ask detailed questions about the statement, she should table some written parliamentary questions. Also, the Chancellor has just been here for a whole hour answering questionswhen, to my certain knowledge, the right hon. Lady was not in the Chamber.

Anne Moffat: Is my right hon. Friend aware of recent reports from some employers who are frightened or reluctant to display festive decorations in the workplace for fear of offending other religious cultures? Will he join me in sending out a signal that that is absolute nonsense, and that we should be able to celebrate accordingly in this country?

Jack Straw: I am aware of the reports and I share my hon. Friend's view that it is total nonsense. My column in the  Lancashire Telegraph this week is about exactly that subject. The simple truth is that my Muslim constituents and friends also wish to see Christmas celebrated. What is forgotten by those who come out with this nonsense is that those of the Muslim faith honour our prophets, and those of the Jewish religion, as much as they honour their own prophets.

David Heath: I am afraid that a press conference in Washington DC is not an appropriate response to this House to a fundamental review of policy in Iraq that has inevitable consequences for British policy. We need a statement here; what is more, we need a debate here on our position on Iraq.
	I understand that the Andaman islanders have only five numbers in their languageone, two, one more, some more and all. That is approximately the level of financial scrutiny that the House is able to give Government spending. Today is Estimates day, and we will discuss the lamentable record of the Government on affordable housing and the scandalous response of the Government to the ombudsman on pensions. What we will not have an opportunity to do is to debate the estimates. Is there not a case for better scrutiny by this House of the Government's spending? That is our primary function, and it is one that I think we do not perform properly.
	Will there be a statement next week on the BBC licence fee, as we will discuss the Digital Switchover (Disclosure of Information) Bill on Monday week, and it is important that the licence fee decision be made before the Bill is debated? Can we have a statement, and a subsequent debate on an amendable motion, to give Members the opportunity to discuss the BBC licence fee properly?
	Lastly, may we have a debate on, and perhaps a review of, the Licensing Act 2003in respect not of alcohol licences, the area that has so often engendered debate, but of public performances? Here I ought to declare an interest, as honorary president of the National Association of Brass Band Conductors, west of England area. The Leader of the House may be aware that a council in Cornwall determined that a brass band in its area could perfectly properly play Christmas carols, provided that it restricted itself to carols such as Away in a Manger and Silent Nightbut that if it strayed to playing anything that did not have a directly religious content, such as Jingle Bells, Frosty the Snowman or Rudolph the Red-nosed Reindeer, it would have to pay a licence fee. Happily, that particular situation has been satisfactorily resolved, but there are huge discrepancies between council licensing committees throughout the country as to what comprises a public performance. Can we not have some degree of consistency, and one that errs in favour of the Christmas spirit?

Jack Straw: On the first item that the hon. Gentleman raises about the Iraq study group, we accept that that is an important review and, as I have told the House, the Prime Minister will answer questions here for half an hour next Wednesday. The hon. Gentleman asks for a debate as well. I cannot promise that there will be a debate on Iraq, or foreign policy more generally, before Christmas, but I shall certainly note that he has made a request for one after Christmas.
	The hon. Gentleman also asks whether we can have better opportunities to debate estimates. The Modernisation Committee is currently conducting an inquiry into the use of non-legislative time in this Housewhich I think is eccentrically distributed at presentand I hope that he will put forward his own evidence on that, as I think he has raised an important issue.
	I note what the hon. Gentleman says about the BBC licence fee, and on his final point, on which I think it is fair to say that he was blowing his own trumpet

Theresa May: And you complain about my script writer!

Jack Straw: At least my last comment was unscriptedalthough I accept that it was just as bad as many of the right hon. Lady's. The hon. Gentleman has a strong case for an immediate review, based on what he says about the kinds of difficulties that local authorities are getting into over Christmas carols. I promise to draw what he says to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport.

Lindsay Hoyle: Will my right hon. Friend give time for a debate on the teaching hospitals and other hospitals in Lancashire, because of the effect that the independent treatment centre might have on them? We know that consideration is being given to handing over 60 per cent. of work. That poses a threat to the staff who work in those hospitals. The time has come to ensure that we have a full debate on that matterand I know that my right hon. Friend is sympathetic to that point of view.

Jack Straw: I am always sympathetic to my hon. Friend; I do not necessarily always agree with him, but that is a different matter. As he knows, there has been huge investment in the national health service in Lancashire, including in the East Lancashire Hospitals NHS Trust, Blackburn, the sum for which is 110 million, the Lancashire teaching hospitals and the Wrightington, Wigan and Leigh NHS Trust, the Royal Albert Edward infirmary and Blackpool and Fylde cardiac centre. I have talked to my hon. Friend about the effect of the so-called CATS schemecapture, assess, treat and supportand I understand the concerns that there are about it. Like him, I am in urgent discussions with the strategic health authority and the trusts involved, and we will follow that up. I also hope that he has an opportunity to raise the matter in a debate in Westminster Hall.

Owen Paterson: Week after week, the Leader of the House shows that he does not understand what has happened to the post office network. His hon. Friend the Member for Vauxhall (Kate Hoey), is chairman of the all-party group on sub-post offices, of which I have the honour to be secretary. Is it possible for her to inform him that the real problem is that some of my post offices used to get 70 per cent. of their income from benefits, and that more than 400 million in benefit income has been deliberately taken away by this Government, along with TV licences, Driver and Vehicle Licensing Agency documents and so forth? They are now left floundering. What is the role of the post office network? Adam Crozier, the chief executive, said that he needed only 4,000 of the 14,400. Can we have a full debate and a statement in the House from the Minister concerned?

Jack Straw: I understand the point about the role of post offices, and post offices in my constituency have also been closed, but there is a reason for that. There is no point in the hon. Gentleman trying to make mischief out of a seminal change in people's behaviour. People no longer go to the post office to buy their TV licences and to get their benefits. They now prefer to have their benefits paid into their bank account and to buy their TV licences by direct debit.  [Interruption.]

Mr. Speaker: Order. Hon. Members should let the Leader of the House answer the hon. Gentleman's question.

George Mudie: Last week, the Leader of the House turned down a request for a debate on home helps no longer being provided for many frail and vulnerable people. At the same time as he turned down that request, a 90-year-old war veteran in a wheelchair was in my constituency office because he had been assessed as being ineligible for a home help. How can a warm-hearted, generous Leader of the House such as my right hon. Friend grant a debate on fisheries next week, but refuse one on the frail and vulnerable being denied home helps?

Jack Straw: I suppose it is because I must have made a mistake last week. I share my hon. Friend's profound concern about this issue. I was not trying to turn down his requestI made some other points and said that it was difficult to find Government time for such a debatebut I very much hope that will be able to use the many opportunities in Westminster Hall or on the Adjournment to raise the issue. Meanwhile, I will do again what I did last weekdraw his concern to the attention of our right hon. Friend the Secretary of State for Work and Pensions.

Phil Willis: Yesterday, as column 307 of  Hansard shows, the Chancellor made a fleeting reference to a very significant reorganisation of NHS clinical research and the Medical Research Council, which will have a combined budget of 1 billion. On the same day, David Cooksey produced one of the most far-reaching reports on how we deal with clinical and pure medical research. Will the Leader of the House ask the appropriate Minister to make a statement to this House on the Cooksey report, and may we have a full debate on this issue, which will affect every Member of this House?

Jack Straw: It is an important report, and although we cannot have statements on every such report, I accept the basis of what the hon. Gentleman says, and I will consult my colleagues on whether we can have a debate on the issue.

Helen Jones: Can the Leader of the House find time for a debate on the workings of the NHS Appointments Commission, which again in Warrington has managed to appoint only two out of the seven primary care trust members from Warrington, North? The PCT is stuffed full of business people and accountants, but there are no representatives of the most health-deprived areas. Will he draw to the attention of our right hon. and hon. Friends in the Department of Health to how profoundly dissatisfied many Members of this House are with the way in which the commission is operating, and its failure to widen participation?

Jack Straw: I am happy to do so; I know that my hon. Friend's unhappiness is widely shared among Members in all parts of the House. These days, people are reflecting on whether such a commission is an appropriate way to make that kind of appointment.

Nicholas Winterton: May I return to the Iraq review report, which is perhaps the most important issue facing this Parliament and other democracies at this time? Is it not important that we in no way undermine the morale of our service personnel in Iraq, while showing total solidarity with, and support for, the fledgling democracy in Iraq? Is it not important, therefore, that the Prime Minister, who is in the United States talking to President Bush about this issue, should make a statement in this House before we rise for the summer recess?  [Laughter.]

Jack Straw: I can almost guarantee that the Prime Minister will make a statement on Iraq before we rise for the summer recess, but as the for the Christmas recess, I cannot make that promise. I repeat: the Prime Minister, if he is nowhere else, will be here next Wednesday, and I am sure that the Iraq study group and the consequences of it will be a dominant subject for questions during that half hour.

Jim Sheridan: My right hon. Friend may be aware of the recent comments by General Sir Mike Jackson about the care and well-being of our service personnel, which were a typical example of yet another military snob pining for the return of a Conservative Government. Will my right hon. Friend use his good offices to remind General Jackson and other senior ranks in our armed forces that there was an opportunity during the recent debate on the Armed Forces Bill for himor, indeed, for any other senior military personto express concern about the care and well-being of service personnel? Bearing in mind the fact that we asked for a federation for the armed forces, not a trade union

Mr. Speaker: Order. The hon. Gentleman should be asking about next week's business. At this time of day, we do not have a forum for complaining about speeches that were made outside this House.

Andrew MacKay: I know that the Leader of the House will accept that he has a great responsibility to ensure that this House is relevant to the people whom we represent. Will he pause and reflect that people out there realise that the Iraq study group report is immensely important? They are pleased that our Prime Minister is visiting President Bush in Washington today, and they are aware that he is returning tomorrow. They simply do not understand, however, why he is not going to make a statement on Monday, and they will not think that Prime Minister's Question Timewhich, as the Leader of the House knows, is diverseis any substitute.

Jack Straw: I note what the right hon. Gentleman says. Let me make it clear that the Prime Minister is not slow in coming forward to make statements

John Bercow: Have a word with him.

Jack Straw: I will of course have a word with himon this and many other subjects. However, I do not want to hold out the promise of a statement in advance of parliamentary questions to the Prime Minister next Wednesday.

Gordon Prentice: Can we have an urgent statement from the Prime Minister on his latest initiative, e-petitions? I signed one yesterday, and the No. 10 website thanked me and urged me to tell my friendsso here I am, telling my friends. I reflected on this, and I wonder how influential these e-petitions are, and whether I should be signing more.

Jack Straw: My hon. Friend should. I know what a friend of the Prime Minister he is, and I must tell him that whenever I go into the Prime Minister's study, the Prime Minister is at his computer terminal, saying, Look at thisthat young lad Prentice just signed another petition. I must bear him in mind for a job.

David Howarth: May I return to the subject of Iraq, and the need for a full debate on the Baker-Hamilton report? The Leader of the House will have seen what it says about violence, insurgency and criminality, and about the Iraqi Government's failure to make any advance on national reconciliation, or even to provide basic services. Is it not important that this House debate at least one questionperhaps he can answer it now, as he was Foreign Secretary at the time in question: to what extent do the Government accept responsibility for the existing situation in Iraq?

Jack Straw: Just on that, let me make it clear that we in the Government accept our responsibilities in respect of Iraq. Those of us who made the recommendation to the HouseI was one of themaccept our responsibilities, and we have made that clear. Of all of us who accept our responsibilities, the Prime Minister is very clear about them, so that is not an issue. Equally, we now have a responsibility, in a very serious situation, charted by the Iraq study group, to ensure a better future for the Iraqi peoplea point on which everybody agrees, regardless of the original position that they took on the war.

David Anderson: I, too, want to raise the issue of Iraq, but to take another line. I hope that my right hon. Friend agrees with me that one of the few positives in Iraq has been the development of an independent trade union movementbut is he aware that the Iraqi Government's decrees are stifling that development? Will he ask the Foreign Secretary to make a statement explaining exactly how we will support the Iraqi trade union movement? I am particularly concerned that they need the strength to stand alone, whatever happens in the future.

Jack Straw: I have seen my hon. Friend's early-day motion 405 in that respect and I will certainly tell my right hon. Friend the Foreign Secretary of his concerns. Iraq started well post-war in defending labour rights, but I know that there has been some backward movement since then.

Nadine Dorries: Debates in the House recently on the NHS have been rightly dominated by the issue of deficits, but an even more fundamental problem is the fact that morale among nursing staff in the NHS is at an all-time low and is beginning to have an impact on patient care. In addition, 185,000 nurses are due to leave the NHS over the next five years and there has been a reduction in the number of student nurse places. I have asked this question before and I shall ask it again: can nursing staff have their own debate in this House, so that they may have access to their MPs to put their cases forward, instead of doing it through lobbying groups?

Jack Straw: I do not accept what the hon. Lady says about the morale of nurses. In the east of England area that covers her constituency, there has been an increase of 8,000 in the number of nurses since 1997, on top of the increased number of GPs and consultants, together with a lot of investment in hospital services and other health services. On the issue of a debate, there are many opportunities to raise issues in the House, although I wish that there were more. I hope that the hon. Lady will give evidence to the Modernisation Committee about how we may better use non-legislative time, both Opposition and Government.

Jim Devine: Can my right hon. Friend find time for a debate about credit companies, especially Provident Personal Credit, which is targeting hard-working families who were caught up in the Farepak scandal? It suggests that they should make their Christmas more affordable, but charges a typical APR of 177 per cent. It is time that we put a cap on such companies, because that is nothing but legalised theft.

Jack Straw: I share my hon. Friend's concern about the issue and I applaud him for his work on it. When he gave me a copy of the leaflet, I thought that the APR was a misprint, but it is not. I notice that the small print also claims that there are no hidden chargeson an APR of 177 per cent. This is a very serious issue and I will draw it to the attention of my right hon. Friend the Secretary of State for Trade and Industry.

Philip Davies: You may not know, Mr. Speaker, that I am a member of a great organisation called the Campaign against Political Correctness. An ICM poll has just found that 80 per cent. of people are fed up with political correctness, including 79 per cent. of women and 72 per cent. of people who did not class themselves as white British. Given that widespread concern, may we have a debate on political correctness to find out what we can do to roll back the tide of political correctness that has done so much damage to this country?

Jack Straw: The concern about so-called political correctness, for example in respect of the celebration of Christmas, is not confined to white people. My Muslim constituents are just as concerned about it, and so are those of Afro-Caribbean heritage. Everybody is concerned about it. I shall send the hon. Gentleman a copy of the excellent article I wrote for the  Lancashire Telegraph today, in which I ask who comes out with such nonsense. Anybody who articulates it is in ignorance about the nature of our culture and religious heritage.

Bernard Jenkin: May I put it to the ForeignI mean Leader of the House [ Interruption. ] The right hon. Gentleman moves jobs so quickly. May I put it to the Leader of the House that the Prime Minister is involved in no mere routine bilateral in Washington. He has gone over to witness the seizing of the reins of foreign and defence policy by the grown-ups of American politics from a discredited White House, which is accompanying the collapse of British defence and foreign policy, the central plank of which has been so-called victory in Iraq. It really is not acceptable for the Prime Minister to return to the UK without giving a statement to the House on what amounts to a substantial change in Government policy. I hope that the Leader of the House will prevail on the Prime Minister on that point.

Jack Straw: If my right hon. Friend the Prime Minister were to be persuaded to come here next Monday, I am not sure that the hon. Gentleman's words would necessarily tip the balance. I note what he says and repeat that if there is no other opportunity, there will be an opportunity at Prime Minister's questions.

Douglas Hogg: Given the Prime Minister's shameful refusal to come to the House to respond to the Iraq study group report, we will have plenty of time to discuss future passport policy. Will the Leader of the House keep in mind early-day motion 336?
	 [That this House notes that it is the intention of the Government that from the Spring of 2007 all first-time applicants for a passport shall present themselves for a personal interview and that from 2009 all applicants for a passport, including renewals, shall present themselves for an interview; further notes that the numbers involved are very great, being over 650,000 in 2007 and rising to an annual figure of around 6,500,000 in 2009 and beyond; believes that the provision of 69 interview offices to meet the demand will be quite inadequate for the purpose; and calls on Ministers to reconsider these proposals, in any event to greatly increase the number of interview offices that will be available, and to abandon the general requirement that applicants for renewal of passports shall submit themselves for a personal interview.]
	The proposal for personal interviews for all passport applicants, including renewals, is a catastrophe waiting to happen and the House needs to discuss it so that we can call on the Government to change their policy.

Jack Straw: I am not sure that it is a catastrophe waiting to happen, but as I was Home Secretary when there were one or two difficulties in obtaining passports I take such warnings with some seriousness. The idea of the interviews is to cut down on serious passport fraud, but I will raise the issue with my right hon. Friend the Home Secretary.

Benefits Uprating

James Purnell: With permission, Mr. Speaker, I wish to make a statement on benefits uprating in the context of our reforms of pensions and our commitment to tackle poverty and build an active welfare state. I shall place full details of the uprating in the Vote Office and arrange for the figures to be published in the Official Report. I can confirm that most national insurance benefits will rise by the retail prices index, which is 3.6 per cent., and that most income-related benefits will be uprated by Rossi, which is 3 per cent.
	From next April, the basic state pension will increase by 3.05 a week for single pensioners and by 4.85 a week for couples, bringing the pension up to 87.30 for a single pensioner and 139.60 for couples. That is a real-terms rise of 9 per cent. since 1997. Next year, the minimum guarantee element of pension credit will rise, as it has since its introduction, in line with earnings. In 1997, the poorest pensioners were expected to live on just 68.80 a week. This rise means that from April no single pensioner need live on less than 119.05 a week and no couple on less than 181.70 a week. And in the Pensions Bill published last week, we will legislate to ensure that that progress is locked in.
	Pension credit is now benefiting 2.7 million pensioner households, with an average weekly award of around 47. The work of the Pension Service means that we are reaching more people and ensuring that they are able to claim their entitlements as easily as possible. We have increased the take up of housing benefit and council tax benefit by those claiming pension credit through the implementation of a new, streamlined telephone application process. More than 350 additional successful housing and council tax benefit claims have been generated each week over the past year. In addition, we have contacted existing pension credit customers not claiming housing or council tax benefits, and as a result have paid out nearly 30 million in backdated claims.
	We now spend more than 10 billion a year more on pensioners than if we had simply continued the policies that we inherited in 1997. Pensioner incomes have risen across the board, with the poorest benefiting the most. We have lifted more than 2 million pensioners out of absolute poverty, and 1 million out of relative poverty. On average, pensioner households next year will now be 1,450 a year better off in real terms than they would have been under the 1997 system, with the poorest third 2,100 a year better off.
	Alongside that rapid progress in the fight against pensioner poverty, we have introduced measures that have helped all pensioners, and will continue to do so. Through the warm front programme, we are now able to offer financial support to all pensioner homes looking to install a new heating system. And we are providing a suite of energy efficiency measures, including insulation and central heating, to low income households. By the end of 2008, we will have insulated 2.7 million homes. As my right hon. Friend the Chancellor announced yesterday, in the coming year we will extend the Warm Front programme, benefiting a further 300,000 pensioner and other households most vulnerable to fuel poverty.
	We have now reached a position in which pensioners are less likely to be poor than the population as a whole. That is unprecedented during a time of sustained economic growth, and an achievement that I believe the whole House should welcome.
	The Pensions Bill that we published last week builds on the consensus created by the Pensions Commission and the national pensions debate to provide an enduring pensions settlement. To provide a solid platform on which people can save for retirement, we will widen the coverage of the basic state pension and increase its generosity by linking its uprating to earnings. The link to earnings will result in a pension that by 2050 will be worth twice as much as it would have been without reform.
	We will tackle inequalities in the current system, and particularly those faced by women and carers, through the introduction of a modernised contributory principle that recognises and rewards social contributions alongside work. Today, around 30 per cent. of women receive a full basic state pension on retirement. Our reforms mean that that figure will rise to 75 per cent. in 2010 and to 90 per cent. in 2025. We will tackle the problem of complexity in the current system through a radical simplification of the state pension, and we will streamline the private pension regulatory environment to make it easier for people to plan and save.
	Because it is crucial that we do not burden our children and grandchildren with the cost of a population spending longer and longer in retirement, we will gradually raise the state pension age to 68 by 2046, thereby ensuring fairness between generations and helping to secure the long-term financial stability and sustainability of the pension system.
	We are laying the foundations for a lasting pensions settlement, but we will truly eliminate inequality in retirement only when we eliminate inequality in working life. That is why our welfare reforms and our aspiration for an 80 per cent. employment rate are so important. It is why we are committed to tackling poverty, and why we want to have an enabling welfare state.
	A decade ago, the UK had the highest child poverty rate in the industrialised world. It is now falling faster than anywhere in the EU. Since 1997, 2 million children have been taken out of absolute poverty, and nearly 1 million out of relative poverty. From April, the poorest children will receive 64 a week through child benefit and the child tax credit. In 1997, they received only 28. My right hon. Friend the Chancellor announced yesterday that, because we know that the last months of pregnancy and first weeks of a child's life can bring extra costs, from 2009 mothers will be eligible for child benefit from the 29th week of their pregnancy. That means an extra 200 for the first child, and up to an extra 130 for subsequent children.
	The standard rate of maternity allowance and statutory maternity pay will be increased by 3.90 to 112.75 a week. Statutory paternity pay and adoption pay will also be increased in parallel to 112.75.
	In 1997, paid maternity leave lasted 16 weeks. From April 2007, that will rise to 39 weeks, and by the end of this Parliament we intend to extend statutory maternity pay and maternity allowance to 52 weeks. At the same time, we intend to introduce an additional period of paternity leave for employed fathers. For the first time, parents will be able to divide paid maternity and paternity leave equally between them if they wish, thus allowing both parents to play a greater role in the first year of their child's life. In addition, for the seventh successive year, we are freezing non-dependent deductions to relieve the pressure on low-income parents who are accommodating their adult children.
	We know that work is the best route out of poverty, and today there are more people in work than ever before. Employment is up by 2.5 million since 1997 and it has risen in every region and country of the UK, with the biggest increases in the neighbourhoods and cities that started in the worst situation. Since 1997, we have increased the employment rate for groups in society that have previously been disadvantaged. Lone parents are up 11 percentage points, and disabled people are up 9 percentage points. Ethnic minorities are up 5 percentage points, and older workers are up nearly 7 percentage points. That means that more than 300,000 more lone parents, 900,000 more disabled people, 1 million more people from ethnic minorities and 1.5 million more older workers are in work than in 1997.
	There are 1 million fewer people on benefits. The numbers on incapacity benefits are falling, not rising. For the first time in 50 years, the UK has the best combination of high employment, low unemployment and low inactivity of any of the G8 countries.
	However, we have further to go if we are to meet the challenges of rapid economic change. As the Leitch review highlighted on Tuesday, the shape of our work force needs to change rapidly to fit the needs of our future economy. Our future success will hinge not just on getting people into work but on supporting them to stay in work and to acquire the skills, confidence and ambition to progress though the workplace.
	As my right hon. Friend the Chancellor said yesterday, we want British workers to gain the necessary skills for the jobs of the future. So we intend to raise the number of apprenticeships to 500,000 by 2020. Through the Train to Gain programme we will increase the number of adults learning basic workplace skills from 100,000 last year to 350,000 a year by 2011.
	Our Welfare Reform Bill will build upon the success of pathways to work, delivering on our commitment to reform incapacity benefits while ensuring security for those who are unable to work. Together with our cities strategy, it will offer a new approach to delivering employment services to some of our most disadvantaged communities.
	Our pathways to work pilots now cover a third of the country, and will be nationwide by 2008. They have continued to deliver outstanding results: the Institute for Fiscal Studies confirms that there has been an increase of over 9 percentage points in the number of people leaving incapacity benefit in pathways areas, as compared with the rest of the country.
	We are making great strides in tackling discrimination and breaking down the barriers that have previously stood between disabled people and work. We have also taken crucial steps in tackling discrimination against older workers. The introduction this October of the UK's first legislation on age discrimination means that people can no longer be denied jobs because of prejudice, and that they have an equal chance of training and promotion, whatever their age.
	This year's uprating moves us further towards our aspiration of a fair and inclusive society that offers opportunity and independence for all. It reinforces our commitments to tackle poverty and exclusion and ensure security in retirement. I commend this statement to the house.

Nigel Waterson: I should like to thank the Minister for his usual courtesy in allowing me an advance copy of his statement. Naturally, I welcome the increases in benefits, as far as they go. We will certainly not follow the example set by the Liberal Democrats a couple of years ago and vote against the uprating orders.  [ Interruption. ] I have obviously drawn blood with that remark.
	The Minister was right to emphasise the position of pensioners. He boasted of having increased the pension by 9 per cent. since 1997, but has he not seen the recent report that shows that each year pensioners face their own distinctive inflation rate of 9 per cent? The Government have rightly given priority to tackling povertyalthough they have given themselves a boost by moving the goalposts on the targets in that areabut the issue of pensioner poverty is every bit as important. Does the Minister accept that 2 million pensioners still live in poverty?
	Why was there no move to increase winter fuel payments for the elderly, especially given the recent sharp rises in energy prices? Why was there no further help for pensioners with their council tax payments, which on average have doubled since 1997? Was the help with those payments merely a pre-election bribe?
	Does the Minister agree with Mervyn Kohler of Help the Aged? He has said:
	It is bordering on an insult to recycle the same Christmas presents year after year, and brazenly claim that the problem of pensioner poverty is sorted.
	Does the Minister accept that there is nothing in the pension reform package to assist existing pensioners? Is not that especially unfair to women pensioners, who either are retired already or will retire before 2010?
	Does the Minister accept that there is a particular problem with benefits take-up by pensioners? Up to 1.6 million pensioners do not claim the pension credit to which they are entitled. The worst take-up of all has always been for council tax benefit, with up to 2.2 million pensioners failing to claim. The latest figures show a reduction in the numbers claiming over the previous year. What are the Government doing to encourage the take-up of that benefit, which is crucial for pensioners, who often live on their own?
	The Minister rightly said that work is the best route out of poverty. We agree, but far too many people are still trapped in an overly complex benefits system. Will he confirm that 1 million people on incapacity benefit want jobs? Will he also confirm that the number of people receiving incapacity benefit for five years or more is now 20 times as great as it was when the Government came to power? In the small printone should always look at the small printof the pre-Budget report yesterday, the income threshold for tax credits was frozen at 5,220. Will he confirm that, as a result, many people will see a fall in the value of their tax credits, and that someone working 30 hours a week on the minimum wage will pay a marginal tax rate of 70 per cent.? How is that designed to tackle poverty or to get people out of benefits and into work?
	Will the Minister confirm that 2.7 billion was lost due to benefit fraud and error last year? That is a wholly unacceptable level of loss of benefit payments. Does he agree that the Government are also set to miss spectacularly their own target for reducing the amount of overpaid housing benefit to claimants of working age by 25 per cent. by this year?
	Will the Minister tell me what plans his Department has for benefit simplification? For example, the current system for disabled people is extraordinarily complex. In the Committee stage of the Welfare Reform Bill, my colleagues questioned the necessity of separate assessment phases for limited capability for work and limited capability for work-related activity. Will he promise to move towards a single assessment process and will he tell the House what he and his colleagues are doing to simplify the benefits system overall?

James Purnell: I welcome the fact that the hon. Gentleman will not be voting against the measures. I was looking at the exchanges from last year, when he was teasing my predecessor about welfare reform. It is interesting to look back. The hon. Gentleman said that the Government were dithering about incapacity benefit reform. We are now legislating on it. He said that the Government would do nothing about the Turner report. We have now brought forward a Bill on it. He said that the Government would do nothing about the Child Support Agency. We have a White Paper due shortly. It is quite clear that, over the last year, there has been real progress on welfare reform. We are legislating to implement the things that he said last year we would do nothing about. I am glad that he recognises that and that the Opposition support us on quite a lot of this.
	In answer to the hon. Gentleman's detailed questions, I think that the rate of inflation that he referred to is the pensioner poverty index, which is a technical measure. It is related only to the proportion of pensioners who get most of their income from the state75 per cent., I think. Of course, the vast majority of them are on pension credit and their pension credit will go up in line with earnings. We are the first Government to do that. They used to have to live on 68.80; it is now going up to nearly 120. We have made the commitment that we will continue to do that in relation to earnings. In fact, we are going to legislate for that. I am sure that the Conservatives will join us in voting for that to continue to be uprated in line with earnings, because that is the certainty that the poorest pensioners in our country deserve. Of course, there is always more that we can do on pensioner poverty. However, it is worth remembering that when we came to power there were more than 3 million pensioners in poverty. Now there are fewer than 1 million. That has been achieved only because of the policies that we put in placepolicies that the Opposition have opposed at every single stage.
	The hon. Gentleman asked what more we could do to increase take-up. We are doing exactly that. I am happy to provide him with a briefing on the pensions transformation programme, which is one of the leading programmes on that in the world. It is making a significant difference. The National Audit Office, which reported on the Pension Service recently, made it clear that good progress had been made. It made some suggestionsin particular, about how we can reach the poorest pensioners in our society and how we can make sure that pensioners claim all the benefits that they are entitled towhich we will look at. I urge any hon. Member who is worried about this matter to go on a visit to look at how the local service is helping people to claim their benefits, and to see the real progress that is being made and the way that that is transforming the incomes of some of the poorest pensioners in our society.
	As part of that programme, we are responding to the point that the hon. Gentleman made about council tax benefit. We want more pensioners to be able to claim that and there is a radical new way for them to do so. There is now a three-page form where there used to be a 26-page-form. Claims can be made over the phone in a matter of minutes. We are looking forward to that starting to make a big difference. As I said in my statement, we are already paying out 30 million extra in backdated claims because of the data-matching exercise that we did.
	The hon. Gentleman raised the issue of incapacity benefit reform. As he knows, there is a major Bill going through the House on that. I thought that he was slightly churlish in not acknowledging the fact that there are now 900,000 more disabled people in work than there were before and in not acknowledging the great success of pathways to work, which is recognised by independent experts as one of the most successful programmes anywhere in the world for people who are on inactive benefits.
	The hon. Gentleman finished by talking about fraud and simplification, which is an important subject. Our simplification unit is constantly looking at ways of simplifying benefits. For example, we have just announced a radical simplification of the state second pension system, which will mean that people will know that they will get 1.40 a week extra in retirement for every year that they care or contribute. We are always looking for opportunities to simplify the system, not least because that can help to reduce error and to deal with fraud. It is worth remembering that, before we came to power, the Tories never even measured what fraud was going on in the system. We have reduced fraud in income support and jobseeker's allowance by two thirds. That is another area where we have made significant progress and one that I hope that the House will welcome.

Sadiq Khan: I welcome my hon. Friend's statement. More than 10,000 pensioners in Tooting will benefit from the increase in the basic state pension. A significant proportion of them will benefit from the increase in pension credit. Will he join me in paying tribute to the staff at Eaga, who have done such a great job in increasing knowledge of and information about the Warm Front initiative? I have held two events in Tooting over the last year, which have increased take-up. Does he share my concern that we need to do more to extend the reach of the new initiatives that are being announced, to make sure that all our pensionerseven the poorest and those from the most deprived communitieswill benefit from some of the announcements about initiatives that he has made today?

James Purnell: I completely agree with my hon. Friend. The Eaga partnership has made real progress on getting people to take up energy efficiency measures and to get new central heating systems fitted. However, it is important that we reach everybody who is entitled to that help and particularly people who may be socially isolated. The extra funding announced yesterday by the Chancellor will aim to do exactly that. I urge hon. Members to make sure that they publicise the Eaga partnership and the work of the Warm Front scheme to as many of their constituents as possible.

David Laws: May I also thank the Minister for his Department's typical courtesy in releasing the statement to us well in advance? He is entitled to draw attention in his comments to those achievements that the Government have made in this area since 1997. However, may I gently suggest that there was quite a large measure of complacency in his statement, particularly set against what is going to be a far less benign environment over the next few years? Will he confirm that in the Chancellor's Budget book yesterday, the Government's projection for unemployment over the next year is that it will rise above 1 million and that their projection for public expenditure is that it will be growing, in current terms, at less than the growth rate of the economy over the period of the next spending review? Is that not going to make it significantly tougher to meet the Government's targets on poverty across the board?
	We are dealing with an uprating statement, but there was no uprating of the winter heating allowance. Perhaps the Minister can confirm that and remind us when there was last an uprating of the winter heating allowance. Will he confirm that energy prices have risen by something like 50 per cent. over the last four years? Will he also confirm that, although his Government have a commitment to eliminate fuel poverty by 2010, the Department of Trade and Industry is now projecting that fuel poverty will double from 1 million households to 2 million households between 2004 and 2006. In the light of that, is it not surprising that the Government are not doing more on the winter heating allowance?
	The hon. Member for Eastbourne (Mr. Waterson) is still clearly quite sore about the fact that his party did not vote against the disgraceful rise of 75p in the basic state pension a couple of years ago. We make no apology at all for voting against that. Does not the lack of progress on the winter heating payment reinforce the case for re-linking and for bringing forward the restoration of the link between the basic state pension and earnings? Is the Minister embarrassed that he is still not in a position to tell the House whether the earnings link will be restored by 2012? Will he confirm that we may have to wait until 2015?
	The Minister pointed out that much of what the Government have done for pensioners has been on means-tested benefits. He gave the impression that the take-up of means-tested benefits is improving, but will he confirm that up to 1.6 million pensioners are not receiving the pension credit and that about 2.2 million pensioners are not receiving council tax benefit? When about 45 per cent. of all the pensioners entitled to council tax benefit are not actually getting it, how can the Minister tell us that take-up is improving or even at a satisfactory level? Surely that reinforces the case for a higher basic state pension, which would take more people out of means-testing and give personal accounts a chance to work.
	Will the Minister tell us what the Government are doing to simplify the benefits system, as means-testing is only one aspect of the complexity? Will he confirm that there are now 51 different benefits and 250 different ratessomething like double the number of 30 years ago? Is that not a major challenge for many claimants? Will he confirm that the Government have made grossly inadequate progress on reducing the number of people on incapacity benefit since 1997? Will he also confirm that the rolling out of the pathways project to all who want to take advantage of it is to be halted because of cuts in his Department's administration budget, which could have very serious consequences? Is he not worried that the Government seem to have a lot of money to spend on keeping people in dependency, but not much to help those who want to work to get back into employment?
	Finally, may I raise the issue of whether we need a more fundamental review of the levels of many benefits that are not linked to earnings. The Minister will be aware that, since 1979, jobseeker's allowance and its equivalents, for example, have shrunk from about 23 per cent. of average earnings to little more than 10 per cent. now. If the Government want to continue to reduce poverty, will they not therefore at some stage have to review the benefits that are not simply in the priority area of child poverty? Will he consider not only trying to simplify the benefits system, but bringing some of the other benefits that have fallen so far behind up to a level that will stand a chance of keeping people out of relative poverty?

James Purnell: As usual, the Liberal Democrat money tree is in evidence again, with a whole bunch of unfunded spending promises, which we will continue to tot up on his account. I reject the hon. Gentleman's accusation that we are in any way adopting a complacent approach to welfare reform. Our approach aims to get 1 million people off IB and to reach an 80 per cent. employment rate. We are proposing probably the most radical reform of the pensions system since Beveridge and we have just published the Lisa Harker report on child poverty. Of course there is more to do. We are in no way reticent about bringing forward radical plans where they are needed to continue to reform the welfare state. We want to ensure a welfare state that is not only generous and able to lift people out of poverty, but active in encouraging people to get into work, providing the right support and the right conditionality to help them do exactly that.
	The hon. Gentleman raised the issue of the winter fuel allowance. As he knows, there was no winter fuel allowance before 1997. It was first introduced at the rate of 20 a year and it is now 200 a year, so it has gone up far faster than earnings and far faster than inflation. For people over 80 years old, it is 300 a year. I remind the House that before we came to power, pensioners could get 60 million a year for help with heating bills; today they can get more than 2 billion, which is quite a significant difference.
	The hon. Gentleman also asked about uptake of pension credit. As I said, we want to do more. The National Audit Officenot normally known for being overly generous to Departmentssaid that we had made very good progress. People recognise that the Pension Service has done an excellent job. It is particularly important to get money to the poorest in society who need it. Take-up of the guarantee credit is now between 70 and 80 per cent. It is important for Members not to talk down pension credit or say that somehow it is old-fashioned means-testing. It is a system for getting money to the poorest in society; it means that the poorest third in our society get an extra 2,000 a yeara massive difference compared with 1997. We want to do more, but people should acknowledge the work that has been done.
	The hon. Gentleman asked when we would introduce the earnings link. As recently as a few months ago, he was probably saying that we were never going to legislate for that. He may have been surprised that we have legislated for it in the Pensions Bill. I look forward to seeing him bring forward his proposals. I think that he is to propose a citizens pension, and we will be asking him exactly how it would be funded. Would it be funded by cutting back on the state second pension, taking money away from people; by cutting back on pension credit allowances that allow disabled people to get 160 a week; or by a raid on working familiestaking money off them and reducing their incentive to save for their retirement? We look forward to seeing the detail of the hon. Gentleman's policy. Like the rest of Liberal Democrat policies, it will probably come from the money tree.
	The hon. Gentleman asked finally why pensioners' money should be going up in line with earnings and he also referred to children. The answer is that since we came to power we have recognised that pensioners should share in the country's growing wealth. We accept the principle that, as the country gets richer, so should pensioners. In fact, pensioners' incomes have gone up significantly faster than earnings over the past 10 yearsof which we are quite rightly proud.
	The best route out of poverty for people of working age is not the benefits system. Whether they be lone parents or disabled people, the best route out of poverty is work. Our system is intended to encourage people to get out of poverty by getting into work. That is exactly what we will continue to do.

Nigel Evans: I heard what the Minister said about taking pensioners out of poverty. I had thought that, with the Government's intention of increasing the age at which people can retire, they just wanted to stop people from becoming pensioners in the first place. Is it not a fact that council tax has doubled since 1997 and that a huge chunk of pensioners are not able to get any benefits to help them stem that doubling of council tax payments? What are the Government going to do to protect the huge chunk of people who have worked all their lives and have small levels of savings or a small second pension from the doubling of council tax?

James Purnell: That is yet another division between the Tory Back Benchers and their Front-Bench team, given that their Front Benchers support the raise in the state pension age. If the Conservatives want to be a serious political party, they will have to face up to big decisions. If the hon. Gentleman is not prepared to support the consensus in the House on pensions, that is absolutely fine.

Nigel Evans: What about council tax?

James Purnell: I am responding to the hon. Gentleman's first point and I shall now respond to his second.
	The right way for people to take up the benefit is to call the Pension Service. As I have explained, the system is far simpler than it used to be. There used to be a 26-page form and there is now a three-page form. It can be done in minutes, so I hope that the hon. Gentleman will encourage his constituents to take up what is owed to them. The previous Government used means-tested benefits as a way of discouraging people from taking up benefits; we do everything that we can to ensure that people do take them up.

Jim Cousins: I reassure my hon. Friend that many of us on the Labour Benches who also voted against the 75p pension increase are very much happier with the direction in which the Government are now moving on pensions and with this year's statement on pensions. However, will he acknowledge that some of today's pensioners may not benefit from the longer-term reforms, and therefore consider uprating the savings component as well as the guarantee component of pension credit in line with earnings? In the context of next year's council tax increases, will he also consider whether there might still be a need for general help for pensioners with council tax that is free of benefit and tax clawbacks?

James Purnell: The Chancellor has just made his pre-Budget report and I am sure that he will take my hon. Friend's comments as the first representation on the Budget. I am glad that our policy on pensions has increased general well-being and that my hon. Friend is much happier than he was with what the Government are doing. The savings credit goes up broadly in line with earningsin fact, I think it has been going up faster. We want to make sure that we reduce the amount of means-testing in the system, so we are making some changes, but our principle continues to be that we want to ensure that the poorest in society have a safety net that rises in line with earnings and that we reward people's modest savings above that level. That is what the pension credit has done and will continue to do.

Nicholas Winterton: May I direct the Minister's attention to pensioners and council tax? He appears to avoid questions on the matter or to avoid responding positively to them. Does he share with me and many Members on both sides of the Housenot least his hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins), who has just contributed a questionthe concern that elderly people feel that they have to risk going to prison for non-payment of council tax because they can no longer meet the huge council tax rises that have taken place? Is the Minister saying that the problem is dealt with in his benefits uprating statement, or are we to see more retired people in court, risking prison, because they cannot pay their council tax?

James Purnell: As the hon. Gentleman knows, there is no reason for any older person to end up in court because of council tax. The key thing is for people to take up council tax benefit if they are struggling to pay and, if I may say so, for councils to moderate their council tax increases. My local authority tries hard to make sure that council tax goes up less fast than inflation and I hope that the hon. Gentleman will be pressing his to do the same thing, thanks to the above-inflation money that the Government have given local authorities over the past few yearsin contrast to his Governmentand the extra money for schools announced in the Chancellor's statement yesterday.

Angela Watkinson: In his opening remarks, the Minister said that he wanted to reduce prejudice in employment. He also announced improvements in maternity benefit, which are welcome to pregnant women and new mums but less welcome to small employers whose firms employ only a handful of people. When the absent employee is a key worker such firms cannot afford to employ an additional person to take on their duties. Has the Minister considered how small firms can be helped so that the increase in maternity benefit does not have an adverse effect on potential employment?

James Purnell: I welcome the hon. Lady's support for the progress that is being made on maternity and paternity leave. I understand that my hon. Friend the Minister for Employment and Welfare Reform is in discussion with representatives of the small business sector to make sure that the hon. Lady's concerns are addressed, and I am sure that he would be happy to meet her to discuss those issues.

Peter Bone: I think that the Minister said in his statement that the Pension Service is encouraging pension credit take-up by visiting pensioners in their own homes. My father, Mr. William Bonea man of great integrity and a public servant all his lifeis a little frail now. A little while ago, he rang me because he was concerned about a telephone call he had received from the Government as they wanted to meet him to investigate his finances. I attended the meeting, which was, of course, about taking up pension credit, and it was fine. I asked the gentleman how many of the people he had visited had actually been able to take up pension credit and he replied, Absolutely none. I am worried that frail, elderly people are concerned about such visits.

James Purnell: The Pension Service is sensitive in such cases and there is specific training to make sure that people deal with customers appropriately. Age Concern carried out research with people who had gone through that process with the Pension Service. There have been concerns that older people do not find it helpful to use the telephone, but actually 70 or 80 per cent. of them found the experience very satisfactory or satisfactory. We introduced a local service of home visits for people who did not want to use the telephone. We try to use the right approach and we always try to be sensitive to the needs of older people to make sure that they understand exactly what they are being asked.

Philip Hollobone: How concerned is the Minister that pensioners are, in effect, facing an inflation rate that could be three times the rate faced by the rest of us? Should not far more work be done by his Department to ensure that pensioners are protected from those cost-of-living increases? In that regard, was not this year, of all years, the time to do something serious about the winter fuel allowance, given the massive utility bill increases for pensioners?

James Purnell: That is why the inflation rate in the pension for next year will be higher than in recent years. Over the past 15 to 18 years, inflation faced by pensioners has gone up less fast than the retail prices index overall. I am not sure that linking pensions to a smaller subsection of the overall inflation figures would be a sensible policy, as it would result in much more fluctuation. We agree that inflation is not the right measure for the future; we will be linking the pension to earnings, which will address many of the hon. Gentleman's concerns, and I am sure that his party, too, will back that measure.

Michael Penning: One group of people who, sadly, do not take up the benefits that they deserve, or for whom the take-up rate is low, are terminally ill patients, and although there is a special fast-track benefit system for them, it is clearly not working. Will the Minister look into how benefits for terminally ill people can be fast-tracked so that they do not have to worry about their financial situation at such a desperate time?

James Purnell: That is an important point and we are looking to address it, in part through the Welfare Reform Bill. We take the matter seriously throughout the whole benefits system. The hon. Gentleman is correct to raise it and we shall continue to address it.

Points of Order

Michael Penning: On a point of order, Mr. Deputy Speaker. A year ago, on 11 December at one minute past 6, my constituency and half of eastern England was rocked by the largest explosion this country has seen since the second world war. The following day the Deputy Prime Minister responded perfectly well by kindly coming to the House to make a statement about the disaster and how plans were going. At present, I am dealing with five Secretaries of State on the continued problems for my constituency following the Buncefield explosion, but no Minister has come to the House since about the matter, even though it was promised that the House would be fully informed about the progress of the inquiry and the reconstruction. Can you advise me, Mr. Deputy Speaker, how I can get a Minister to come to the House to tell the country and my constituents what is going on with regard to that disaster?

Mr. Deputy Speaker: I understand the hon. Gentleman's great concern about that very serious matter. Ministers on the Treasury Bench will no doubt have heard his remarks, but it sounds to me like an ideal subject for an Adjournment debate.

David Burrowes: On a point of order, Mr. Deputy Speaker. On 4 December, the Under-Secretary of State for the Home Department, the hon. Member for Bradford, South (Mr. Sutcliffe), responded to my question about potential cuts in the integrated drug treatment programme by saying that he did not accept that the Government had cut the programme. I have since had the opportunity to check the position. Paul Hayes, the chief executive of the National Treatment Agency for Substance Misuse confirmed that the 28 million pledged to the scheme for 2006-07 would be scaled back to just 12 million. I checked in the Oxford English Dictionary that the definition of cut is reduce or cease, so do you, Mr. Deputy Speaker, share my concern that the Minister may have inadvertently misled the House and that the position needs to be corrected?

Mr. Deputy Speaker: I understand the matter that the hon. Gentleman raises. There is a great problem with the interpretation of statistics of all kinds, but all I can suggest is that he pursues the matter as vigorously as he normally does.

BILL PRESENTED

Income Tax

Mr. Chancellor of the Exchequer, supported by Mr. Secretary Darling, Mr. Secretary Hutton, Mr. Stephen Timms, Dawn Primarolo, John Healey and Ed Balls, presented a Bill to restate, with minor changes, certain enactments relating to income tax; and for connected purposes.: And the same was read the First time; and ordered to be read a Second time on Monday 11 December, and to be printed. Explanatory notes to be printed [Bill 14].

ESTIMATES DAY
	  
	[1st Allotted Day]
	  
	SUPPLEMENTARY ESTIMATES 2006-07

Affordable Housing

[Relevant documents: The Third Report from the Select Committee on the Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions (now the Communities and Local Government Committee), Session 2005-06, HC 703, on Affordability and the Supply of Housing, and the Government response thereto, Cm. 6912.]
	 Motion made, and Question proposed,
	That, for the year ending with 31st March 2007, for expenditure by the Department for Communities and Local Government
	(1) further resources, not exceeding 1,351,500,000, be authorised for use as set out in HC 2,
	(2) a further sum, not exceeding 1,357,195,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and
	(3) limits as so set out be set on appropriations in aid. [Jonathan Shaw.]

Phyllis Starkey: Access to housing, especially affordable housing, is a key issue for all our constituents and it is becoming ever more urgent. I am sure that we all know from our constituency case loads about the effect of the shortage of housing on individuals. It reduces the ability of young people to buy their own home and puts enormous pressure on social housing, especially social rented housing, and families are trapped in overcrowded and sometimes substandard housing. That was the reason why the Communities and Local Government Committeealthough, at the time, it was the Select Committee on the Office of the Deputy Prime Ministerdecided to devote its first large investigation to the subject of the affordability and supply of housing. I am sure that that is also the reason why there are many hon. Members in the Chamber. I know that a great many of them wish to speak, so I will try to keep my remarks fairly short.
	Over the past 15 years, it is indisputable that the annual rate of house building has fallen while the rate of household growth has increased. There was an upturn in the number of houses built in 2005there were 160,000 built, which was the highest number since 1994-95but there is clearly still a need for further increases. Although there is a slight excess of houses over households nationallythe figure was 1.7 per cent. in 2003that figure is falling and there is enormous regional variation.
	The Committee endorsed the Government's view that the rate of house building must be increased if problems of house shortages are not themselves to increase. However, given that the latest estimates of household growth are even higher than before, at 209,000 households a year, the Committee questioned whether the Government's target of an extra 200,000 houses a year by 2016 was actually enough. We urged that the target should be regularly revisited and reviewed.
	The Committee also thought that national figures were not especially informative, given that there was such huge regional variation. Some 60 per cent. of household growth is occurring in London, the east, the south-east and the south-west. There are already 3.5 per cent. more households than homes in London. The National Housing Federation, in an excellent leaflet that I commend to hon. Members as a source of statistics, highlights the scale of the affordability chasm in the south-east, such is the extent of the problem. Of course, the Committee accepted that there are housing hot spots in many other parts of the country and that affordability problems are both increasing and occurring in parts of the country in which they previously did not.
	The Committee felt that it was absolutely crucial that regional and local house building targets reflected regional needs. We thought that they should not be just dictated by the market, but that equal weight should be given to the needs of local economies and environmental and social issues. In the regional and local context, this is not just a question of housing numbers. Additional housing should match local demand through both a mix of tenure and a range of housing sizes and types.

Mark Lancaster: The hon. Lady makes a powerful argument about housing targets. However, she will be aware that on the eastern and western flanks of the city that we represent, the planning authority is not the local authority, but an unelected, unaccountable quango. Does she agree that if any community is to be genuinely sustainable, it must have the support of local people, and that the planning authority should thus be accountable to local people, not the national Government?

Phyllis Starkey: I hope that the hon. Gentleman will forgive me, but I am speaking as the Chair of the Select Committee. I am trying to represent the all-party Committee's report, which was supported by Conservative Members. I would ask that we do not divert the debate by concentrating on the city that both he and I represent. There will be plenty of other forums in which to deal with those specific problems in our city, which, as he knows, I feel as strongly about as him.

John Bercow: Given that over the past five years house prices have risen sharply and that average earnings are about 5,000 a head lower in rural areas than in urban areas, does the hon. Lady agree that in legitimately seeking an expansion in the quantity of housing available in areas such as mine and others, it is important that the Government address in terms both the requirements for infrastructure in general and my constituents' concerns about water shortages, sewerage capacity and implications for the food plain?

Phyllis Starkey: Indeed. The Committee made recommendations on those matters, which I shall come to later.
	As I said, housing planning needs to be related to regional and local economic planning. Employment and housing need to be related to each other. Account must be taken of the fact that employment has run ahead of housing in some parts of the country, while the reverse has been the case in others.
	On housing tenure, the Committee noted that the major decrease in house building numbers has been seen in the provision of social housing. Of course, council housing stock has been eroded through the right to buy. We accept that home ownership is an aspiration for very many because it both meets housing need and provides a way of gaining access to wealth and equity. We also supported the Government's schemes to promote access to home ownership through shared ownership and equity schemes, but we felt that there had to be not only an increase in the supply of shared ownership schemes, but support for people to enter the market. Support for equity mortgages could otherwise just further price growth, which would not improve the situation.
	We were worried that there was insufficient emphasis on the supply of social rented housing. When Shelter gave evidence to the Committee, we endorsed its target of building an extra 20,000 new social rented homes annually. We were worried that the Housing Corporation had enormously increased the proportion of its funding being spent on shared ownership. Although social rented housing still represents slightly more than half the housing provided by the Housing Corporation, we want investment in social rented housing to be protected by requiring the corporation to spend a certain percentage of its funds on such housing, rather than allowing the proportion to erode further.
	A great deal of the pressure for housing growth is coming from changing demography. Again, demographic pressures vary from region to region, but, broadly speaking, there has been an increase in the number of one-person households, which has happened partly because we are all living longer and also because of changing family patterns and relationship breakdown. Those factors need to be reflected in the housing provided in regions. There are shortages in new family housing in many regions, especially social rented family housing. We want to make it clear that new housing must meet the increasing needs of the elderly population, by including provision for sheltered housing, and include housing for people with disabilities.
	As part of building more sustainable communities, the Government have quite rightly put an emphasis on increasing density in new housing developments. That makes the best use of land and can be much more public transport-friendly. The Committee stressed, however, that that must not lead to a preponderance of smaller units and flats simply to achieve that density. There are examples in which high density has been achieved successfully while still providing family housing. We want the Government to ensure that funding streams are sufficiently flexible and that local authorities are encouraged to use their planning powers effectively to ensure that high density is achieved with a proper mix of housing sizes and tenures.
	The Committee wants the best use to be made of existing housing and we urge the Government to increase their target on reusing empty homes. We were persuaded that further measures were needed to discourage the purchase of second homes in places such as rural areas and those in which in-comers purchasing second homes, who usually have higher incomes than the existing population, are driving up house prices and depriving local people of access to the housing supply. The Government have not been persuaded on either of those points.

David Taylor: My hon. Friend refers to the priority of ensuring that empty housing is reused. Is not the greater use of under-occupied housing a parallel issue? In the estates for which I am responsibleno doubt my hon. Friend will have had similar experiencesI often find that three or four-bedroom local authority houses are occupied for long periods by an elderly person for want of either appropriate sheltered accommodation, or a financial incentive to free that house up for a family. What does the Committee have to say about that?

Phyllis Starkey: I do not recall the Committee addressing that specific issue, but it is dealt with in the points that we made about the need to take account of the increasing number of elderly people when planning what types of new housingboth housing for sale and social housingis to be provided. One problem that local authorities have in persuading elderly tenants to move out of their present housing and into new properties is that they often do not have suitable, attractive sheltered housing. Clearly, no one would want to force elderly people to move out of their homes into less acceptable accommodation.
	The Committee recognised that housing makes an enormous contribution to climate change, and that factors such as where and how new housing is provided could have an environmental impact. Planning plays a key role in facilitating methods of development that minimise effects on the environment, but the issue is not clear-cut. New build concentrated in and around urban areas, and in expanding urban areaseven if it is on a greenfield site, and so has a negative environmental impact in that waycan reduce commuting, if there is an excess of local jobs. That would have a positive environmental impact. It could make public transport a much more realistic alternative, as well as regenerating and revitalising our cities. That is an issue on which the balance must be struck locally. It is, of course, extremely important for the quality of life of people living in our cities, including new residents, that green spaces in cities be protected, and not used for urban packing.
	Because of the upward trend in building regulations, new housing is much more sustainable than most existing housing. The Committee urged the Department for Communities and Local Government to sign up to a climate change public service agreement, and we want the code for sustainable buildings to be strengthened still further. The Government's moves on a commitment to zero-carbon housing are welcome.

Adrian Bailey: In the context of the debate on new housing and climate change, did the Committee examine, or make a recommendation on, the issue of changing building regulations to promote the use of geothermal heating, or any other form of heat-preserving structures, in developments?

Phyllis Starkey: Not specifically, but the Committee welcomed the fact that building regulations were being improved, and that the code for sustainable building has put much more emphasis on microgeneration and renewable energy. The Committee welcomed the measures that were being taken, but we thought that the measures should have gone further, and should have been faster.
	Some evidence to the Committee, particularly from the midlands and the north, showed that freeing up development on greenfield sites could discourage development on difficult brownfield sites, which is often crucial to urban regeneration. The Committee recommended that planning policy statement 3, which at the time of our report was in draft, should restore the sequential approach to prioritising brownfield, but that is not a recommendation to which the Government agreed. They argued that local authorities can deal with that issue through the planning and local development frameworks.
	Finally, on infrastructureI am sorry that the hon. Member for Buckingham (John Bercow) has left the Chamber, but I am sure that he will read  Hansard tomorrowobviously, if new housing and new housing areas are being created, we need to create new communities. The provision of infrastructure such as roads, schools, GP surgeries and so on is crucial. In some parts of the country, such as Kent and the Thames Gateway, building land is available, some of which has had planning permission for quite some time, although that permission has not been implemented, because the area needs the infrastructure to make those development sites viable.
	The precise mechanisms for funding infrastructure were not part of the investigation or of our report, but I am sure that hon. Members will note that the Government are today publishingindeed, they may already have done sothe next stage in consultation on the planning gain supplement, on which the Committee has also reported. That could, in future, be a mechanism for providing a guaranteed source of funding for the infrastructure that will be needed when new housing comes on stream. In growth areas such as Milton Keynes and Ashford, there is already such a mechanism: the infrastructure tariff, under powers in section 106 of the Town and Country Planning Act 1990, which ensures that developer contributions come through, and that there is forward funding, so that infrastructure is provided in a timely mannerindeed, sometimes before the housing is provided.

Martin Linton: Does my hon. Friend not agree that it would be beneficial if section 106 agreements gave an exact definition of affordable housing, setting out the criteria that would have to be met, specifying the bedroom groups and giving more detail? She may know of a case in my constituency in which affordable homes were offered at 90 per cent. equity, at a cost of between 300,000 and 400,000. Inevitably, they were taken up only by people on very high incomes, such as City bankers, yet because of the lax way in which section 106 agreements are drafted the homes still counted towards Wandsworth borough council's affordable housing target.

Phyllis Starkey: I am aware of that case, and there is clearly a concernparticularly in London, where land values are very highthat the affordable housing powers under section 106 are not operating as effectively as they might. In another report, the Committee urged the Government to look again at section 106 and to consider ways in which it could be used more effectively, as there seems to be considerable variation in the way in which local authorities use those powers. Some of them use the powers extremely effectively, but there is evidence that many do not.
	Finally, I simply repeat that the issue is incredibly important to the people whom we represent, and to young people in particular, who unfortunately do not have the same expectations about being able to buy their own home that their parents may have had. The Committee's report provides an overview of the main issues in the subject, and gives key recommendations. I hope that, at the end of the debate, the Government will respond positively, not only to the recommendations, but to other issues that I am sure hon. Members will raise in the debate.

Andrew Stunell: Liberal Democrat Members welcome the rise in public and political awareness of the housing issue, which is clearly a major policy concern. We welcome the debate, and I congratulate the hon. Member for Milton Keynes, South-West (Dr. Starkey) and her Committee on producing a thoughtful, thorough and balanced report that is challenging and provocative in places. Its measured language sometimes disguises the fact that it points out that things are essentially going from bad to worse, and that in many respects Government policy is not yet fit for purposeand, indeed, that the Government are perhaps not even properly engaged on the right issues.
	The report, and other reports that have come to our attention, suggest that we have a problem with housing. There is not enough of it; it is not of the right type, in the right place or at the right price; and, in many ways, it is not sustainable economically, socially or environmentally. Clearly, putting all that right is not a simple job, and it cannot all be done by the Government or the House, however hard we try. There are, however, some clear messages in the Select Committee's report, and I hope that when the Government respond to the debate, they will pick up on those messages, as well as some of the report's more refined points.
	As well as the Select Committee report, there has been the Barker review, a Shelter report, and a Town and Country Planning Association reporta range of documents, all of which essentially make the same key points. The first of those points is the deficiency in the provision of social housing in England. Some 600,000 social housing units have been sold through the right-to-buy mechanism, and although expanding owner-occupation is, of course, a good thing, it means that there has been a significant reduction in the social housing stock. In addition, since Labour came to power in 1997, the waiting list for social housing has gone up from 1 million to 1.5 million families. Some 525,000 families have been added to the waiting list for social housing at a time when 600,000 social houses and housing units have been lost in the sector.
	We know from reports, including some paragraphs of the Select Committee report, that 94,000 families are homeless or in temporary accommodation; another 500,000 are in overcrowded accommodation, especially in the south-east and London. However, every part of the country is affected, including my constituency in Greater Manchester. Some 14 billion has been stripped from the social housing budget as a result of right-to-buy sales. That money could have built a year's supply of housing, so the Liberal Democrats strongly endorse the construction of more social housing, as recommended by the Select Committee and by other reports, including the Barker report. It is essential that we tackle that problem.

Emily Thornberry: Will the hon. Gentleman therefore recommend that Islington council set an overall target of 50 per cent. of new-build social housing, as opposed to its present mealy-mouthed policy?

Andrew Stunell: That sounds very much like our exchange in Westminster Hall a week or two ago. I shall come on to the question of the proportion of affordable homes that local authorities can or should provide in their planning agenda, but I should like to know whether the Government accept the 48,000 additional social housing units a year recommended by the Barker report? Do they prefer the 54,000 figure recommended by the Cambridge Centre for Housing and Planning, or do they advocate a different figure? The figures that the Department is using are clearly inadequatea fact that the Select Committee report underlines.

Michael Gove: The hon. Gentleman has been admirably clear about the increased housing supply that he would like, but how will it be paid for? Will it be funded by increased Housing Corporation grant, or by developer contribution, because, as the hon. Member for Milton Keynes, South-West (Dr. Starkey) suggested, suppliers of market housing provide a proportion of social housing? If it is the former, by how much should taxes increase? If it is the latter, how much additional market housing is needed to provide that additional social housing?

Andrew Stunell: That brings us to the crux of the issue raised by the hon. Member for Milton Keynes, South-West. How can we use the planning and development system to lever in more social housing? I draw the hon. Gentleman's attention to South Shropshire district council and other councils that set a high affordability requirement for developers who submit proposals. My colleagues on South Shropshire council set a 50 per cent. requirement, of which 50 per cent., or a quarter of the overall total, is social housing for rent, enabling people to be taken off the rented social housing list and given accommodation.

David Howarth: Cambridge city council set a 50 per cent. affordability target, but it was not backed by the inspector, so it fell to 40 per cent. The inspector said that the system is constrained by national policy. Contrary to what the hon. Member for Islington, South and Finsbury (Emily Thornberry) said, the problem is rarely local policy, but the national policy framework. I hope that the Minister will deal with that point in her speech.

Andrew Stunell: I thank my hon. Friend for raising that serious matter. Many local authorities would like to go further and faster in setting affordability requirements in their area.

Philip Dunne: Will the hon. Gentleman give way?

Andrew Stunell: May I finish my sentence? That is what residents want, too. In surveys across the country, the majority of residentssome 68 per cent.say that more affordable housing should be available in their area. There is therefore public will for such provision and, in many cases, local councils are willing to deliver. It is true that national guidelines have been used to inhibit that development. Will the Minister tell us how PPS3 and the affordable housing paper that she has just published will help? Will she scotch the rumour that the planning Bill will include measures to remove those decisions from the local level and subject them to national regulation? Will she agree that affordability should be determined by local planners, and if planners wish to opt for high levels of affordability they should be permitted to do so?

Philip Dunne: I am grateful to the hon. Gentleman for giving the example of South Shropshire district council, which is in my constituency, and on which I have the great pleasure of continuing to serve as a local councillor. Regrettably, however, its policy is not the uniform and unqualified success that he would like to portray. I should like to highlight two issues. First, several developers are keen to apply for developments in the district but have been deterred by the significant affordable housing requirementthey cannot make the figures stack up.

Mr. Deputy Speaker: Order. I am reluctant to intervene on the hon. Gentleman, but he appears to be gently embarking on a speech. Perhaps he should leave it there, as I know he is seeking to catch my eye.

Andrew Stunell: I was warned in a dream that the hon. Gentleman had some information. Having visited south Shropshire and talked to residents, I gained the impression that the programme was popular and successful. I am sure that he will contradict me if I am wrong, but, whatever some developers believe, there is no shortage of developers willing to invest in the area. I am not surprised, because it is an attractive area in which housing demand is high. Another issue highlighted by the Select Committee report is the shortage of housing units in most areas.

Andrew Slaughter: Before the hon. Gentleman moves on from social housing, may I point out that Members with an interest in the subject have sought to intervene, because we have an academic interest in discovering what Liberal Democrat policy is? If he is taking refuge in the slogan, Leave it to the locality, does he agree with the Shelter target of additional affordable homes in London? Does he agree with the Mayor's target of 50 per cent. affordable housing, and does he agree that 70 per cent. of such housing should be social housing for rent?

Andrew Stunell: There is clearly a separate but significant problem in London, some aspects of which have already emerged. There are more households than homes. In some areas, second homes are a problem. Indeed, most Members in the Chamber probably have a second home in London, which, to some extent, contributes to the problem. Clearly, we need more social housing in London. I do not want to enter into a debate about the proportion, but I readily agree that we need more social housing, including a significant fraction in London.
	Moving on to the broader issue, there are not enough homes for families to live in. The number of households created every year exceeds the number of homes being built by 10,000 to 30,000. The balance of the figures might change slightly, but there is clearly a problem. The Select Committee report predicts that the gap will widen, and that the issues that need to be addressed will become more serious.
	Reference has already been made to tackling the issue of empty homes. I welcome the legislation that the Government have introduced to improve empty homes management, but I note that there are still almost 700,000 empty homes in this country. A significant fraction of those empty homes are in London and the south-east, and a significant fraction of them have been vacant for more than six months. There is more to be done, and the rate at which empty homes are being brought back into use is far below what could and should be achieved.

Michael Gove: Will the hon. Gentleman tell us where Britain stands in the European league table for the proportion of empty dwellings? It would be instructive for the House to recognise that we have fewer empty homes as a proportion of our total housing stock than other EU countries.

Andrew Stunell: Plenty of British citizens are going all over Europe to buy up second homes, such as deserted farmhouses in Italy, France, Germany, the Greek islands or anywhere else. It is true that some other countries have a building stock that exceeds their requirements. The point is not where we stand in relation to France, Italy or Spain, but where we stand on homeless families and families living in overcrowdingin many cases, new immigrant families in London live in appalling conditions.

Kelvin Hopkins: On the point made by the hon. Member for Surrey Heath (Michael Gove), if Britain has fewer empty homes, it could be a result of the desperate shortage of housing in so many areas. Britain is more urbanised than many other European countries, and people are living in unfit houses in town centres, which is happening in my constituency.

Andrew Stunell: The hon. Gentleman has probably answered the intervention by the hon. Member for Surrey Heath (Michael Gove) better than I have.
	I would describe the third area touched on by the report as the risks and rewards of home ownership, which is a difficult subject for this House to discuss. We are all in favour of a home-owning democracy, but we must recognise that that brings some significant risks, both at the micro level of the individual and the family and at the macro level of the economy. I am sure that the Minister will be happy to say that since 1997 an extra 1 million families have taken up owner-occupation, some 600,000 of whom have done so under the right to buy. Now, 71 per cent. of all families live in owner-occupation, which is the highest rate in western Europeit is also higher than the figure for the United States, which might be thought of as the ultimate property owning society.
	Interest rates are about half the average level of 10 or 15 years ago, and employment is at an historically high level. As a consequence of those two factors, people can undertake a greater level of mortgage debt. At the same time, we have experienced problems with pension funds, which will be the subject of a debate later this afternoon, and that has undermined confidence in pensions in many ways. There has been some stagnation in the stock market, which has made direct investment less attractive. Taking all those factors together, investment in housing has been very attractive.

Greg Hands: Before the hon. Gentleman moves off the subject, will he tell us about Liberal Democrat policy on the right to buy? Did the Liberal Democrats support the cuts in the maximum discount in recent years? And is it Liberal Democrat policy to support the restoration or extension of those discounts?

Andrew Stunell: I am being encouraged to say no, but I do not need any prompting. The money raised from the right to buy should be reinvested in social housing, and the fact that that has not happened is to the discredit of the Labour Government, whom I would have expected to do that given their philosophy and background.
	Housing is a very attractive investment, as well as being a route to secure ownership. Deposits are much larger than they were 10 years ago, and parents are increasingly helping their children to put up the deposit. Multiples of earnings are at record highs, and the position is supported by households who earn double incomes. The whole pyramidthe Select Committee report hints at this and took evidence on the pointdepends on the long-term security and price expansion of the home-ownership market. There is clearly a tension between securing that and making housing affordable and accessible.
	If we were to follow the Barker report view that we should go for a 1.1 per cent. increase in house prices, which would match the European averageI understand from the hon. Member for Surrey Heath that that is the comparison that we should usewe would need to construct an additional 140,000 homes each year on top of the existing numbers to suppress that price bubble. The Government might introduce such a policy, and this House might approve it, but there is still a major tension between maintaining vigorous and sustained growth in house prices in order to sustain the economy and the security of those who are already on the ladder and making the ladder long enough at the bottom for new people to get on it.

Andrew Love: As the Select Committee report states, the Government's objective is to increase the level of supply to try to ease price pressures. The hon. Member for Hazel Grove (Andrew Stunell) appears to be suggesting demand-side measures. Will he elaborate on which demand-side measures he is thinking about?

Andrew Stunell: My point is that in attempting to solve one problem we must be careful that we do not create another. I am simply drawing hon. Members' attention to what is in the report and making sure that we do not invest in policy measures in one direction that cause damage in another.

Michael Gove: I am grateful to the hon. Gentleman for giving way for the third timehe has been very generous. He has pointed out some of the strains in increasing housing supply too much. What would be an appropriate increase in overall housing supply as far as the Liberal Democrats are concerned? When it comes to the specific question of affordability, to what extent is the constraint on available land a factor in affordability, and what is Liberal Democrat thinking on releasing new land for development?

Andrew Stunell: I thank the hon. Gentleman for his inquiry. We have some answers to those questions. If one puts together the different points made by the Select Committee, it is clear that the major area of expansion for new homes needs to be in the social housing area, not to suppress what is done in the private sector, but to restore what is done in the social sector. As the report states, the level of house building in the private sector has, broadly speaking, been the same over the past 10 years. The problem has been the shortage of social housing. That is clearly an area that needs further Government attention.
	Significant measures need to be taken to make our housing stock more sustainable, at a time when it contributes 27 per cent. of carbon dioxide emissions to the atmosphere. I hope that the Minister will be able to give us credible reasons why the Thames Gateway is not required to be wholly sustainable, why the decent homes standard need not have a sustainability requirement built into it, and why the code for sustainable homes is so weak and feeble. The report refers to the need for building regulations to be upgraded to address those points. This is probably the fourth or fifth time that we have debated this, and I would be interested if the Minister told us what approach the Government plan to take on the Sustainable and Secure Buildings Act 2004, which gives them some of those powers.
	Having referred to the economic and environmental sustainability of the housing market and the housing sector, I want to say a few words about social sustainability. In expanding housing development, we must not bring back the housing-only estates that were the plague of the '50s, '60s and '70s; instead, we must build sustainable communities that incorporate not only public transport but employment, education and public service access. It is important not to recreate the difficulties and problems of previous generations.
	In some parts of the country, the problem of second homes is grievous; some of my hon. Friends feel that greatly. Equally, in other areas there is poor demand, which the pathfinder measures are designed to solve. It is a complex situation. Even in the north-west, we have pathfinder projects less than 40 miles from places where excessive demand for second homes is squeezing out local populations. Housing is not a liquid market, and it is not easy to match demand and supply, even over a very small area.
	In producing this report, the Select Committee has done the House and the Government a service by analysing the problem and providing a critique of current policies. I look forward to hearing the Government's response.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Before I call the next hon. Member, I remind the HouseFront Benchers, Back Benchers and those who are seeking to intervenethat today's business is so structured that time is limited in both debates. Perhaps hon. Members will bear that in mind when making their contributions.

Andrew Smith: I welcome this debate and congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and the Communities and Local Government Committee on their report on affordable housing.
	To meet the needs of my constituency, we need much more housing of all kinds. When mid-terrace former council houses on estates are selling for more than 180,000, there is indeed an interesting debate to be had about what is affordable. I note from the excellent Housing Federation booklet that my hon. Friend commended to the House that while the average house price in the south-east is 8.9 times the regional average income, in south Buckinghamshire and Oxford the ratio is more than 12 times, making it virtually impossible for many people in my area to buy a house. We certainly need housing of all kinds. I strongly endorse the Committee's conclusion that
	the overwhelming need is for social rented housing to make up for the shortfall in supply.
	There is a compelling case on social, economic and environmental grounds for substantially more such housing in central Oxfordshire and for the review of the green belt that is necessary to enable suitable sites to be identified and developed.
	The social case for additional housing is well documented in the strategy put forward by Oxford city council, and it is evident in every one of my advice surgeries, as I am sure that it is in those of my hon. Friends. High house prices, high rents and a shortage of social and affordable housing condemn thousands of people in our city to unacceptable living conditions. They make it very difficult for people working locally to live anywhere near their place of employment, and cause recruitment and retention problems for private and public sector employers. City council homelessness statistics show that the proportion of households in temporary accommodation is running at more than twice the national average. The need for more affordable housing is regularly raised with me by the chamber of commerce, the universities, the hospitals, other employers large and small, and the trade unions. Annual completions of affordable housing in Oxford, for rent and social ownership, have been running at about 150 a year, but a rate many times that level is needed to make real inroads into housing need. One important need that is often overlooked in the understandable focus on homelessness and temporary accommodation relates to the plight of families with children who are already in social housing, but are stuck in cramped maisonettes and flats and face a wait of years if they are ever to get a transfer to a house with a garden.

David Drew: My right hon. Friend represents an urban area, but it is just as much of a problem in semi-rural areas such as mine, where people are effectively driven out and have to go to the market towns, where they end up in overcrowded maisonettes and flats. It is really awful, and we must do something about it.

Andrew Smith: Yes, indeed. Moreover, it sends out entirely the wrong signal. These are hard-working families paying their rent and abiding by the tenancy conditions, yet they are stuck for an unacceptably long time in unsatisfactory accommodation. The situation must change.
	Acute pressure on the existing private housing stock is also having damaging effects. In my area, it is leading to subdivision of houses and excessive multiple occupation, exacerbating the shortage of family housing and often damaging the quality of life in residential areas. I therefore welcome last week's statement by my hon. Friend the Minister for Housing and Planning giving new emphasis to the importance of family housing and gardens, because precisely such housing and gardens are being relentlessly eroded in my constituency. What is more, the tight constraints of the green belt [ Interruption. ] It would be good to have the support of the party of the hon. Member for Hammersmith and Fulham (Mr. Hands), who is making sedentary interventions, when it comes to the need to review the green belt in central Oxfordshire. The tight constraints of the green belt impose a pressure-cooker effect on residential areas that can be relieved only by meeting more housing need and demand though new development on the edge of Oxfordfor example, to the south-east and to the north. The Minister's recent announcement of 1 million of growth-point funding towards city centre housing was welcome, as it can help to create 600 to 1,000 new homes. However, the scale of housing need and the demographic and employment trends are such that the provision of some 2,000 dwellings or more a year for the next 20 years is the sort of expansion that we really need.
	The economic case for land to be allocated for more housing is equally strong. As a globally recognised location with excellence in many areas of research, medicine, bioscience and other applied sciences, as well as publishing, and outstanding achievements in the automotive industries by BMW and Unipart, Oxford has the potential to make a still greater contribution to the regional and national economy. It would be a terrible waste for all that to be held back by unduly restrictive planning policies. The south-east plan must give full recognition to Oxford's enormous potential and realistically address the land provision and transport infrastructure that is required for it to be fulfilled, including regional links such as the east-west rail line.
	The environmental case for housing growth in central Oxfordshire is also strong. Urban extensions to Oxford are far and away the most likely to be sustainable, with shorter journeys to work, and a higher proportion undertaken by means apart from the private car than in any other location in Oxfordshire.
	The Select Committee report has some interesting comments about environmental sustainability and minimising the adverse impact of new housing. I believe that we need to move beyond old assumptions about growth always damaging the environment. We are an innovative and creative country, and we must hold to and fulfil the ambition to design new development, with supporting transport and other infrastructure, in ways that minimise pollution, conserve energy, incorporate power microgeneration and increase biodiversity. The Chancellor's commitment yesterday on carbon-neutral housing is a welcome step in that direction.
	I endorse what the Select Committee report says, and the comments of my hon. Friend the Member for Milton Keynes, South-West in her excellent speech, about forward funding for transport, health services, schools and other physical and social infrastructure, and the importance of the need for next year's spending review to address that. I support the Minister for Housing and Planning and her colleagues in the representations that I am sure that they will make.
	It is crucial to knock on the head the myth that those of us who strongly support more house building somehow do not care about green spaces or want to concrete over south-east England, and all the other nonsense that is trotted out. Nothing could be further from the truth.
	The beautiful setting of Oxford and the quality of its environment depend more on the green wedges coming into the heart of the city than on the rigid preservation of existing green belt boundaries. Land on the edge of the city, which makes a high quality contribution to the landscape and ecology of the area, must of course be strongly protected and safeguarded. However, other areas of the green belt do not fall into that category. Where extensions are made to the city, an integral part of the plan should be to extend and safeguard the green wedges, for example, along the flood plains and out towards Shotover, so that development is balanced by the proximity of open space and attractive landscape.
	Oxford is in the fortunate position of having the potential to grow in those sectors of high added value that the Chancellor mentioned yesterdaywith all the attendant benefits for living standards and welfarewhile enhancing its environment and the quality and availability of housing. That is an enormous opportunity and responsibility, and we look to the Government to play their full part in fulfilling it, so that, through enlightened planning policy and investment, we secure for all our citizens the affordable and decent housing to which they should be entitled in a civilised society.

Philip Dunne: I take on board your earlier comments about trying to be brief, Mr. Deputy Speaker.
	I represent a rural constituency. As most hon. Members appreciate, concerns about affordability are not restricted to urban areas. In our sparsely populated rural area we experience many problems similar to those in urban areas. The main difference is lack of delivery in rural areas. House building has focused in and around urban areas, and funding from the Government to support affordable housing has followed. That was brought home to those of us who serve on the Public Accounts Committeeit is good to see other members of it hereearlier this week when we considered the National Audit Office report, A Foot on the Ladder: Low Cost Home Ownership Assistance, which forcefully made the point that house prices are rising fast and incomes are relatively static, especially in rural areas, and the problem is getting worse.
	The NAO identified 112 million of efficiency savings that could be made from the implementation of the Government's policies on supporting affordable housing. Redeployment in the way that the NAO suggests would help more than 4,000 people into affordable housing. I hope that the Department will take note of that and try to implement some of the recommendations.
	I have recently been lobbied by the Midlands United group of housing associations, which has made a submission to the Chancellor for the comprehensive spending review, pointing out some of the impact of the lack of priority afforded to the midlands, especially rural areas, in recent years. The east and west midlands have almost one fifth of the country's housing stock but receive less than 15 per cent. of public funding for housing. Last year, just under 30,000 new homes were built in the midlands, but only just over 3,200 were affordable homes. That is not good enough. The needs of the area are acute.
	One reason for the lack of priority is that no funding has been provided through the Government funding mechanisms for key workers who live outside London, the east and the south-east. That means that, of the 470 million that the Government spent last year on their affordable housing schemes, 221 million was spent on key workers, but not a single pound was spent outside those areas. None of that was spent in the midlands or in the north. One reason for that is that we are labouring under an excessively centralised housing allocation. The new regional spatial strategies grant unelected regional assemblies the ability to allocate houses according to their priorities. Not surprisingly, that tends to focus house building and growth on the larger population centres. For example, in the west midlands, a preponderance of housing is being allocated to the urban areas, leaving the rural areas to pick up the scraps.
	I agree with the hon. Member for Hazel Grove (Andrew Stunell) that we should consider local determination based on local priorities, and provide much more flexibility for local authorities to decide how many houses they should build and where they should build them.

Andrew Stunell: Does the hon. Gentleman agree that in many rural areas outside the green belt, local communities would welcome the addition of affordable housing but find themselves restricted by the current national guidelines and regional rules?

Philip Dunne: Yes, I agree. I was about to cite the example of South Shropshire, which the hon. Gentleman used earlier. This year, the district is restricted to 136 units of housing compared with an average in the past 10 years of more than double that. As a member of that local authority, I can report that we are arguing for reverting to between 200 and 250 housing units in the next allocation from the regional assembly.
	The problem in rural areas, as in other areas, is compounded by homelessness. Again, the hon. Member for Hazel Grove mentioned that. The housing association in South Shropshire has approximately 2,000 units. About 10 per cent. come up each year as people move on or move out. Approximately 200 units are therefore available each year. However, between 200 and 230 families present as homeless in South Shropshire every year. Given the proper priority to house the homeless, there is an almost static market in the existing social housing structure in the district. The need to lever in additional affordable housing through social housing and affordable schemes is pressing in my area, as it is in many others.
	The hon. Member for Milton Keynes, South-West (Dr. Starkey), the Chairman of the Select Committee, referred to the density guidance as a positive measure to try to improve availability. That may be correct in some respects, but I am worried about using a blanket density minimum throughout the country. In the few areas in my constituency that are able to put up housing, there is now a requirement to build at the same level of density as applies in the cities. Consequently, three and four-storey blocks of flats are being slapped into little estates on the edges of small towns or villages of predominantly single-storey bungalows or two-storey houses. Those flats are completely out of character with the rural conditions in which they are situated. The Government need to look carefully at this prescriptive centralising approach; they should be more prepared to show flexibility in rural areas.
	The hon. Member for Hazel Grove applauded the measures relating to the affordability percentage, but the experience of imposing a 50 per cent. affordability criterion in South Shropshire has not been as rosy as he might have anticipated. The project is still in its early stages, so that might change over time, but we are now three years into the project, and we are on the third set of revisions to the plans put forward by the Liberal Democrat administration. Developers are not flocking to South Shropshirefar from it. They are giving it a wide berth, and choosing to develop in neighbouring authorities where no such constraint exists to put pressure on their profit.

Roger Williams: I note the points that the hon. Gentleman is raising, and I am sure that the plans are improvable. Does he not agree, however, that an important issue in connection with affordable housing is land values? The policies of his district council can ensure that developers have a realistic view of land values, and can therefore purchase it at such a price as to make their developments of affordable housing reap rewards for them.

Philip Dunne: I accept that land values play an important part in determining the overall cost of housing, but I do not accept that that policy is having the effect of reducing land values. The problem is that, because of the restricted number of units that we can build, the land values rise whenever consent is granted. The land value for affordable housing rises as well, because that is the only kind of housing that can be built. So the policy is not having the desired effect that the hon. Gentleman suggests.

Anthony Steen: The problem in Shropshire that my hon. Friend has mentioned is mirrored in south Devon, where the Liberal-run council in Torbay has been insisting on 40 to 50 per cent. affordable homes in each development. As a result, perfectly good sites are not being developed, because the private developers are saying that they cannot possibly manage to subsidise so many homessubsidy is what affordable housing is all about, after allout of the profits of the private houses that they are building. The consequence is that the private housing prices go up, and the subsidised houses never get built, because the developers do not want to build them. So we are on a hiding to nothing. The whole concept of affordable homessubsidised homesis a total myth.

Philip Dunne: I am grateful to my hon. Friend for that intervention, which illustrates well one of the unintended consequences of these policies. I can give the House another example from my constituency. The largest development that has been consented is in a town called Cleobury Mortimer, where 112 houses were consented. This happened just before the introduction of the 50 per cent. policy, but more than one third of those houses were to be affordable. They have not been delivered, however. The builder had secured the opportunity to fund the affordable housing through the construction and sale of the open-market housing, but because of the high proportion of affordable housing in the scheme, he did not find it attractive enough to be able to sell the open-market housing. The entire scheme is therefore stymied, and is at present stuck. We are therefore delivering neither affordable nor open-market housing, despite having that large consent in that town.
	I have touched on some of the potential solutions to those problems, and I want to finish by highlighting one or two in greater detail. It is important to give a fair allocation of public housing grant to areas across the country, not only for social housing but in low-cost assistance. There are just as many key worker categories and jobs needing to be filled in rural areas as there are in urban areas, and it seems quite wrong that Government policy should prevent that from happening.
	Local authorities should be given more control over the number of houses that they are able to consent to each year. They should be less prescriptive about density, and more imaginative in the way in which they allow houses to be reconfigured. Examples include dividing a reasonably large house into two to provide a retirement flat for elderly parents or, in our area, allowing farmhouses to be divided into two to provide separate dwellings within the same house for parents and children, when the children start to have children of their own. Such reconfiguration should be permitted without imposing the requirement to sell the houses. A local authority could impose a section 106 agreement to require the two units to be sold together, thus preventing the opportunity to make capital gain, which seems to be the fear of so many of our local planning officers.
	There should be much more flexibility over the supply of land outside the green belt. Areas such as mine have acute housing need. Indeed, the housing needs survey found that we should be building 287 affordable houses a year, but we are building less than half that number in total at the moment. The local authority should have the flexibility to allow some greenfield development, or to change the definition of brownfield to encourage farmyard development, for example. There should be more local determination. I agree with the right hon. Member for Oxford, East (Mr. Smith) that supply is part of the key to this issue, in terms of pricing and availability. We need the Government to show flexibility on this matter.

Karen Buck: I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey), the Chair of the Select Committee, on its report, and on the fact that the Committee is also undertaking an inquiry into the social housing element. I shall be concentrating on social housing in my speech today. Like other hon. Members, I want to emphasise that a key issue is supply. We have seen a 30 per cent. fall in lettings in the social housing sector since 1999-2000, and a decline in the overall stock in the social rented sector of 238,000 units, mostly as a consequence of the right to buy.
	We have seen a welcome upturn in new housing provision recently, particularly in London but also in other parts of the country, but this has to be considered in the context of a continuing fall in supply that outstrips provision. Last year in London, for example, 6,037 additional affordable homes were constructed, but 11,549 were sold through the right to buy. It is important that we consider both sides of the equation and concentrate on the broader picture if we are to address what is nothing less than a crisis in the provision of social housing to meet the needs of our population.
	I want to make a couple of remarks about the impact of the fall in provision of social housing on community cohesion, a subject that is dear to my heart. There is no doubt that many citiesLondon in particularare experiencing an exacerbation of community tensions as a consequence of the competition for the scarce resource of housing. We must also recognise that the impact of homelessness and overcrowding falls disproportionately on black and minority ethnic communities. The figures show that 12 per cent. of white households live in overcrowded accommodation, while 35 per cent. of black and minority ethnic households do so. The figure for Bangladeshi families is 62 per cent. The impact is disproportionate. Not only do our minority communitiesparticularly our Muslim communitiesbear the brunt of housing need, but the settled migrant communities and white households in parts of London that are experiencing changes in their communities as a result of population movement are themselves deeply anxious about those changes and resentful of the fact that their sons and daughters are unable to obtain properties either to buy or to rent.

Sadiq Khan: Has my hon. Friend read The New East End, published earlier this year? While it confirms that that is one of the reasons for the hostility felt by white working-class east Londoners towards east Londoners of Bengali origin, it also makes the noteworthy observation that the hostility is directed at the system rather than the players. It is worth thinking again about the 1968 legislation whereby need trumps entitlement.

Karen Buck: I have indeed read the book, which provides an excellent analysis and should be required reading. Although, sadly, individuals sometimes bear the brunt of the grievances of those whose needs are not met, the failings of the system are to blame.
	I am concerned about recent evidence of the difficulty of obtaining temporary accommodation to meet the needs of homeless families in my borough. Placements in such accommodation are often responsible for the community tensions that I have described. As I have already mentioned briefly to my hon. Friend the Minister, I have seen an increasing number of families in temporary accommodation lose homeseither temporary settled homes or private rented accommodationin my borough. They are then moved, sometimes after 12 or 15 years' residence, to temporary accommodation in Dagenham, Barking or other parts of east London because my borough has been unable to find them the temporary accommodation that they need.
	What is particularly galling is that on a number of estates in my area up to half the council accommodation has been sold through the right to buy, and is now in the hands of individuals and property companies buying to let. That engenders endless frustration. We frequently find ourselves re-renting flats that were available for social accommodation as temporary accommodation at 400, 430 and 450 per week, while next to them stand former council flats that could have been rented for 90 a week. The housing problem is not the only consequence: housing benefit expenditure on temporary accommodation has risen from 82 million a year in 1997 to 1.2 billion today.
	We are pouring public money into temporary accommodation, often via the right-to-buy sector, in order to keep people in accommodation much of which is still sub-standard. My recent experience confirms that those families are not settled in long-term temporary accommodation, but are being moved from pillar to post. They are being moved from a borough that has been their settled home. We are pulling their children out of school, and taking them to the boroughs where community tension is strongest. That makes no sense as housing policy or as social policy, and it makes no financial sense. We must do something radical to stop it.

Greg Hands: As the hon. Lady may know, earlier this week the Chairman of the Select Committee and I visited her arm's length management organisation, CityWest Homes. On 31 December, Westminster city council will become the first council in Britain to meet the decent homes standard. Will that not go some way towards improving the conditions she has described?

Karen Buck: If the council has met the requirements of the decent homes initiative, that is entirely due to the Government. The Government devised the initiative and provided the money for it. I celebrate the fact that tens of thousands of tenants in my constituency and my borough have been given new kitchens and bathrooms and had their homes upgraded thanks to the generosity of a Labour Government, and I am grateful to the hon. Gentleman for giving me an opportunity to say so.

Andrew Slaughter: Is not the Conservative party's attitude to the decent homes programme summed up rather more clearly by a comment from a Tory cabinet member of Hammersmith and Fulham council? When asked about the programme, he said It saddled us with 192 million of debt, thus demonstrating not just a complete misunderstanding of the basis of its funding, but the fact that the council did not want it in the first place.

Karen Buck: My hon. Friend has seen a very deleterious change in housing provision and policy in his borough since the Conservatives took control in May, and, sadly, tenants and others in housing need will bear the brunt of that change.
	My hon. Friend the Minister has been enormously sympathetic and of great practical assistance in responding to the problem of overcrowding. Westminster is one of the boroughs with the highest levels of overcrowding in the country, and the words Shirley Porter are not entirely out of context in that regard. Unfortunately, despite my hon. Friend's support, the situation is not only bad but deteriorating.
	In the last fortnight, I have been visited by people from three new households. Families of six are sharing one-bedroom flats. Can Members imagine the pressures that that causes? Children risk growing up in surroundings in which they cannot study, in which they have no privacy and in which any illness will spread like wildfire. Overcrowding has been known to cause tuberculosis to spread among family members. Mothers tell me that their teenage sons have left home and are on the streets because they cannot bear to return to a household where they cannot retreat to a bedroom of their ownin which they may have to share a bedroom with a 12-year-old sister. Indeed, there may be four or five family members sleeping in a single bedroom. That is intolerable.
	My hon. Friend has announced investment in loft extensions and deconversions. I welcome that, and the planning changes that will help us to deal with overcrowding. We should, however, bear in mind that the Housing Corporation's programme for 2006-08new housing supply is, of course, entirely driven by the Housing Corporationcontains provision for 3,300 homes with three or more bedrooms. That represents a 1 per cent. increase in the supply of property in that band. There are 13,867 households waiting now, even before the inevitable pressures gain momentum. We are still in the foothills when it comes to meeting that crying need.
	As my hon. Friend knows, some housing need in London is met through sub-regional housing partnerships, because not all boroughs can meet their own needs. That is, I think, a strong argument against allowing entirely local determination for planning provision. Some of the boroughs in our sub-regional partnership are playing deeply deceitful games. All the anecdotal evidence shows that outer London boroughs are designating almost all their new housing developments disabled housing in order to deny the legitimate expectations of central London boroughs to draw on that stock. I hope that my hon. Friend will pursue the boroughs that engage in such practices. If we cannot rely on the meeting of demand in the round rather than simply in our own boroughs, and if local authorities are implicitly encouraged to take part in those games, we shall not be able to meet our housing needs.
	It is entirely right for us to try to fulfil the legitimate wish of young families to buy their homes, but I have a few caveats. The first relates to the way in which home ownership has squeezed out the investment that is required to meet the needs of homeless families, those in overcrowded accommodation and those in social housing generally.
	Secondly, there are real risks in promoting home ownership to categories of people who cannot afford to sustain it. The Minister knows that I had a recent Adjournment debate on the impact of major works and service charges on council leaseholders, some of whom are in serious need. A steady flow of households have bought into temporary accommodation and then found that they could not maintain their homes because of service charges or major works bills or, for instance, a young family who were overcrowded in a one-bedroomed shared ownership property have been unable to stay. Some families have lost their shared ownership property and have had to present themselves as homeless as a consequence. It is therefore important that we do not see such ownership as a panacea.
	It is often not recognised that shared and affordable home ownership involves subsidy. There is a slight political tendency to see those in social housing as feckless poor who get handouts from the state, as opposed to entrepreneurial home owners. In fact, however, we are subsidising shared ownership by 50,000 per unit in London. That may or may not be the right choice, but it is important to understand that all forms of affordable housing investment have financial consequences.
	The Mayor's housing strategy for London, which I very much welcome, also strongly emphasises the targeting of investment in home ownership towards intermediate housing to meet the needs of families. He estimates that there are 91,000 tenants in London who could buy their own homes but need family-sized homes. Shared ownership is too heavily skewed towards small units such as studios and one-bedroom flats, which do not allow families to grow and stay in central London.
	The Government's children strategy is based on the concept that every child matters. Demonstrably, and sadly, every child does not matter at the moment. Children in homeless families and in grossly overcrowded accommodation do not matter in the sense of receiving the kind of support and investment that would get them out of a crisis situation. Next year's comprehensive spending review is our last and best opportunity to put an end to the worst crisis in public policy.

Greg Hands: I am a member of the Select Committee that produced the report, although I was not a member of the Committee for the duration of the inquiry. I, for one, do not agree with all the report's findings, but I hope that it has been a helpful contribution to what is becoming a more extensive and pressing debate. I am also vice-chairman of the all-party arm's length management organisations group, and I represent a constituency in which about a third of housing stock is social housing, which is well above the national average but round about the London average.
	My position is to support in general more house building. It seems that some of that building will inevitably have to be on greenfield land, which I support somewhat reluctantly, although it is not the same as supporting construction on green belt land, about which I have severe reservations, as I do about the Government's approach announced earlier this week.
	My constituency suffers badly from the phenomenon of lack of affordability of private housing. The  Evening Standard on 4 December included an article entitled, Has it ever been harder to buy a house in London? The picture that accompanied the article is of Wingate road in Hammersmith W6. According to the caption, a four-bedroomed house with garden, with an asking price of 750,000, was sold for 866,000 within a week. Affordability is a very large issue in my constituency. In central London, the average home price, as distinct from house price, is about to break through the 500,000 barrier.
	I also want to reflect on another phenomenon that is getting coverage and interest at the moment: flight from London. That is a growing problem, and a report in the  Evening Standard today says that about 250,000 people per annum are leaving London. My constituency has one of the highest population turnover rates in Britain of 20 to 25 per cent. each year. It is also now the second largest constituency in Britain in terms of population, after the Isle of Wight. Therefore, a lot of people are moving out, but even more are moving in.
	My constituency is also the second youngest in Britain after Battersea, and is among the top 10 for the location of young professionals. I want to address many of my comments to the problems that face young professionals and young families in getting on the housing ladder, including the private rented sector, in London and the south-east.

Andrew Slaughter: I appreciate that the hon. Gentleman is off to Chelsea, so one hears, and that Wingate road and similar roads might be my problem rather than his after the next election, but does he acknowledge at all the need for social housing in his constituency, or like his colleagues who have newly taken over Hammersmith and Fulham council, does he consider only young professionals and the need for housing for sale, which is clearly substantial?

Greg Hands: I thank the hon. Gentleman for that intervention. He and I had numerous such conversations over many years at Hammersmith and Fulham council. May I say that his adoption as the Labour party's prospective parliamentary candidate for Hammersmith has cross-party support, and I wish him all the best in his attempts to represent roads such as Wingate road. I am certainly not addressing other issues to the exclusion of social housing. I merely wanted to emphasise some private sector housing issues in London. I am fairly sure that he will speak later about many of the issues facing the social housing sector, which I will certainly not ignore.
	We need more social housing for rent, but that cannot be the only solution. The Government have a terrible record, especially in London, on social housing completions and lettings. Affordable housing completions are down from 45,000 in 2000-01 to 32,000 last year. Since 1997, new social lettings in London have almost halved under Labour. The problem is very serious. The Labour party, however, is pretty much proposing that social housing for rent is the only solution to this country's housing affordability crisis. In that regard, I must diverge from the opinions expressed by Labour Members.

Sadiq Khan: Is the hon. Gentleman not being a bit disingenuous? His hon. Friend the hon. Member for Ludlow (Mr. Dunne) referred earlier to the Public Accounts Committee, which this week examined a report that confirmed that 500 million has been spent each year, over the past few years, on low-cost home ownership. Could he be more generous in his praise for this Government's ability to help people to get a foot on the home ownership ladder?

Greg Hands: That expenditure is certainly welcome but, unfortunately, it is simply not making enough impact. The impact in constituencies such as mine is very small. I shall refer later to some of the low-cost home ownership initiatives, including shared ownership, in my constituency, in a development that is not too far from the hon. Gentleman's constituency.

Nick Raynsford: I hope that the hon. Gentleman will not unwittingly mislead the House through a rather selective use of statistics on housing completions in London. He will know that in the year that he chose as a baseline, the housing market was in a state of total collapse, and as a result the Government of the day invested in what was known as the housing market programme to try to rescue it. That resulted in a spike in social housing output in London in that year. If he looks at the statistics, he will see that the figure of 6,000 social housing homes completed last year in London is the highest for more than a decade. Will he give the Government credit for that?

Greg Hands: It is certainly helpful to have more social housing completions in London, but the Government do not really have a good record on the issue. It is interesting to take an intervention from the right hon. Gentleman, who, I think, was one of my predecessors as the MP for Fulham. If I am not mistaken, his slogan at the time was, Nick Raynsford lives here. He moved out soon afterwards, and he would have great difficulty affording to move back into the constituency owing to some of the problems that I have outlined.

Michael Wills: The hon. Gentleman is saying that there is not enough social housing; presumably his party would spend more money. If so, could he explain how he squares that with the third fiscal rule to which his party is also committed?

Greg Hands: I am talking about a general desirability that there should be more social housing and more low cost home ownership in London and places such as my constituency.
	The disparity between average social rents and average private sector rents is enormous. The national disparity is about 70 per cent. In London, the figure falls to about 48 per cent; the average social rent is about 48 per cent of the average private sector rent. One of the consequences is that those in lower paid jobs simply cannot afford the private sector rent, but because they are in work they, almost by definition, have very little chance of accessing the social rented sector in constituencies such as mine.
	I want to talk about a specific development in my constituency, which to a large extent

Emily Thornberry: Before the hon. Gentleman moves on, I would be interested to hear his ideas as to how people on low incomes can live in London in anything other than social housing. The average income of people living in council estates in Islington is 6,290, according to the housing needs survey. Where could they live apart from council housing?

Greg Hands: The hon. Lady misunderstands my point. I am referring to people who are not currently in social housing and are generally in lower paid jobs and who simply cannot afford private sector rents. There is a big gap between those with access to social housing in London and those who are able to afford private sector housing for rent. I wanted to address those people specifically.
	Imperial Wharf in my constituency has been cited as a model by many who are promoting the idea of imposing a blanket rule of 50 per cent. social housing for rent across London and the rest of the country. Imperial Wharf is the largest residential housing development in west London in the past 10 years or so, with 2,200 to 2,300 homes. It was the first large development, as far as I am aware, that had a 50 per cent. requirement imposed on it by the council through the developer, St. George. It was approved in 1999 and is now nearing completion. It is a good time to review the nature of the Imperial Wharf development. I think that the London Mayor, Ken Livingstone, has been to visit it, as have various Government Ministers.
	Imperial Wharf has been a terrible example of what can go wrong as a result of imposing an arbitrary 50 per cent rule. The prices of the 50 per cent. of houses in the private sector are incredibly high. It has been marketed as London's biggest affordable housing development, but private sector homes have been on the market for between 500,000 and 1.25 million. That part of the development fails in terms of affordability.
	I have visited a large shared ownership development for key workers called Mallard House a few times. It was featured in the  Evening Standard a couple of years ago as Britain's most expensive shared ownership scheme; I cannot remember the exact prices but they were in excess of 300,000. The newspaper went door to door trying to find out who lived in this key worker housing unit. A total of three people in the 80 units could in any way be defined as key workers. The development simply has not been a success, because the shared ownership has been made far too expensive.

Sadiq Khan: Is the hon. Gentleman saying that the reason for the high prices is the greed of the developer resulting from a lack of definition of affordable housing, or that the developer is using the high prices to subsidise the affordable units?

Greg Hands: Unless we make the private sector housing extremely expensive at a riverside site such as that, it will be difficult to deliver a large amount of social housing for rent. The hon. Gentleman's optimistic confidence in the 50 per cent. rule across London will turn out to be gravely misplaced.

Andrew Slaughter: The hon. Gentleman is being very generous with his time. I do not agree that the poor should not be able to live in prosperous areas, which seems to be what he is saying about riverside developments, but I am also worried that he is anticipating my speech. If he is saying that affordable housing in such developments is too expensive, surely what is needed is more intervention to ensure that there is more affordable housing, not less. Will he join me in condemning the Conservative council in Hammersmith and Fulham, which said that, in every case, it will prioritise expensive shared ownership housing over social rented housing?

Greg Hands: We have had these exchanges for about seven or eight years. The hon. Gentleman approved the Imperial Wharf development in the first place, so it is perhaps understandable that he is a little touchy about it. It is certainly not the objective of anybody to have very expensive and over-priced private sector homes put on the market in my area of London. There is a real crisis facing the hon. Gentleman's constituents as a result of the lack of affordability throughout west London, which is one of the main reasons for the flight of 250,000 people from across London per annum.
	One of the people who would disagree the most with the hon. Gentleman is the former Labour councillor for the Sand's End ward, which covers the development to which I referred. Sadly, he lost his seat by more than 700 votes in May. He described the units of social housing for rent as completely unacceptable, of poor construction and very small. He called them unacceptably small, and it is a shame that his voice is no longer being heard speaking out against such developments, which he thinks have been catastrophic failures.
	Moving on, I wanted to look at how we could make private sector home ownership in constituencies such as mine more viable. First, we need more house and home building across a variety of sectors.

Kelvin Hopkins: The hon. Gentleman is talking about the quality and size of housing. Was it not the Conservative Government who abolished Parker Morris standards? Is he suggesting that they should be reinstated?

Greg Hands: That will be a matter for the Conservative party's ongoing policy review and we will look at it very closely.
	There is a need for more homes across a variety of sectors and Labour's approachthat rising house prices will necessarily lead to a generation of more units of social housing for rentis simplistic. We need a greater diversity of housing in constituencies such as mine. We need to speed up the planning system and make it more flexible. The planning gain supplement will almost certainly not be the solution; in general, taxing home building will not be the solution and previous attempts to capture the uplift in land prices for the Treasury generally have been a failure.
	The Labour policy that, as a hard and fast rule across London and perhaps across Great Britain, 50 per cent. of new stock is to be social housing for rent is misguided. It is strongly contested by some London Labour councils. The London borough of Newham has, I think, come to the conclusion that what it needs is more lower cost private sector home ownership of the sort that I describe, in order to create a better balance in that borough. Such councils argue that they want to increase home ownership and shared ownership.
	There are also genuine problems to do with stamp duty being too high and with the threshold for inheritance tax being too low, but that is probably a matter for a separate debate. There are people who are paying inheritance tax on former local authority right-to-buy properties on estates such as Sulivan court in my constituency. The original intention behind inheritance tax was not that people who bought their council flats under the right to buy in the 1980s and 1990s should later leave an inheritance tax bill to their children.
	What we need across Britain is a much more liberalised approach to land use, and especially urban land use. There has been a lot of over-classification. In my constituency, the previous Labour council has classified some areas as key local shopping areas. The Dawes road is full of unused shopsdisused retail frontagewhich could, with a little more imagination, be transformed into residential property.

Sadiq Khan: The hon. Gentleman talked about more imaginative use of land. Is he therefore surprised that some of his party colleagues have, for example, signed an early-day motion objecting to new homes in West Sussex, and that there is opposition from his Front-Bench team to new homes in Surrey, and that Essex MPs are opposing increased housing for Essex, and that, in another early-day motion, Hertfordshire MPs oppose increased housing in Hertfordshire? How persuasive is he with his fellow Tory MPs?

Greg Hands: I welcome that intervention repeating comments in the parliamentary Labour party brief. It is our view that local considerations should be taken into account. I am speaking about the problems of inner London, and those faced by my constituents. It is not for me to dictate what the policy

Sadiq Khan: Will the hon. Gentleman give way?

Greg Hands: No, I shall not do so again. I have been extremely generous and several Members are waiting to speak.
	We need more market forces in home building. There are significant supply and demand issues. We need more housing of all types. I wish there to be greater liberalisation of the system. We also need to do far more to help young people and young familiessuch as those in my constituencyaccess private sector housing and home ownership.

Michael Wills: I shall endeavour to follow the guidance on brevity, Mr. Deputy Speaker, and I should apologise in advance for my imminent absence from the Chamber as I am required to attend a Committee sitting. I wish to make a few remarks on how the affordable housing problem affects my constituency in Swindon; it is not just a problem for London and south-east, as we have heard.
	Swindon desperately needs more affordable housing. More than 5,000 names are on the waiting list for social housing, and thousands more people, especially younger people, are unable to buy their own homes. The average price of a new home in the Swindon area is now more than 205,000. As a result, many young people in my constituency cannot afford to buy a home in the neighbourhood in which they grew up.
	In our debate, we have heard much about the appropriate target for affordable housing. That is not the issue in Swindon; the issue in Swindon is whether the target that has been set will be met. In its local plan, Swindon borough council is committed to ensuring that 30 per cent. of all new housing is affordable, yet the borough council agrees new development after new development with levels of affordable housing either well below that or with none at all. Every development that is permitted without such a level of affordable housing is a wasted opportunity for my constituents. About 2,000 new houses are being built in Swindon every year; their total sales value is more than 400 million. The fact that, despite such a huge figure, so few affordable houses are being built is a blow for every one of my constituents who yearns to own their own home but cannot afford to do so.
	It is imperative that that neglect of affordable housing is reversed, because Swindon borough council is about to embark on a massive expansion of housing in the town; the total could be about 35,000 houses, with a current market value of about 7 billion. How much worse will the situation be in terms of social division and all the wasted opportunities for home ownership if the council does not ensure that at least 30 per cent. of that huge expansion is affordable?
	Sadly, there is, however, very little evidence that the council has grasped the urgency of the situation. Last year, it launched a flagship statement50 promises to the people of Swindonby which it said it wanted to be judged. Sadly, it did not commit itself in those 50 promises to meeting its own target of 30 per cent. of new houses being affordable; it committed itself to only 16 per cent. I have gathered thousands of signatures on petitions calling for the council to ensure that more affordable housing is built, but the council has ignored those petition signatures.
	I do not know the reason for that neglect. Is it because the council values affordable housing less highly than other planning gains, or is it ineffective in its dealings with developers? However, there is certainly a widespread perception among my constituents, which I share, that the developers that have made, and are about to make, billions of pounds out of building houses in Swindon have given very little back. Whatever the reason for Swindon borough council's current failings on affordable housing, it must do better.
	I congratulate my hon. Friend the Minister and her Department on the new planning guidance. It is certainly a step in the right direction in encouraging local authorities to ensure that more affordable housing is built, but what more can Ministers do to force local authorities to meet the targets that they have set in their local plans? The new planning guidance does not spell out the penalties for such failings, and I will be grateful if she undertakes to spell out what they could be, so that local authorities know that they cannot go on ignoringas Swindon borough council isthe needs of all those who depend on affordable housing to make a home for themselves and their families.
	I would also be grateful if the Minister undertook to devise a timetable for such interventions, because the longer a local authority delays in meeting its targets the more difficult it will be for it do so. Every development that is agreed with levels of affordable housing below the target simply raises the hurdle higher for subsequent developments and makes it all the less likely that overall targets will be met within the time scales of the local plan. Everybody should be able to afford their own home and I ask the Minister to put measures in place to persuade Swindon borough councilif necessary to force itto make sure that everyone in my constituency can do so.

John Pugh: It is of course very unusual for Members of this House to talk and not to know exactly what they are talking about; it is almost unprecedented, in fact. But we are all in that situation with regard to affordable housing, because there is a central question: affordable to whom, and affordable where? That means different things in different places to different people. Although I am a member of the Committee and participated in the report, I can talk authoritatively only about the situation in my constituency of Southport and the north-west. Week after week, I meet young couples who can neither rent nor buy appropriate property. They are inadequately housed with relatives, and in some cases are potentially homeless. They do the rounds and get on long council housing waiting lists and approach the housing associations, and by and large, they do not get very far.
	I will set aside the general problem that many Members experience of constituents whose children would, in the normal run of things, expect to have houses in future, but wholike my own childrenfind themselves with no mortgage, no pension arrangements and a certain amount of debt as a result of going to university. Instead, I want to focus on the immediate needs of the people who come to see me about housing. Generally, they are low-waged couples with children. My constituency is a relatively affluent seaside resort, but even in affluent-seeming resorts there are, in general, low wages in the care, retail and leisure sectors. Such people cannot commute a long way to get to work; they have to live locally, because commuting is expensive. They often have school-age children and caring responsibilities locally, and they depend on family networks for child care themselves. So in my constituency, we have the phenomenon of people with jobs who have needs, and simply not enough houses. It is a north-west housing hot spot.
	A well-documented study has established that the housing situation has been a restraint on the economic growth of the town. It causes migrant workers with low housing needs to be drawn in to fill the gaps, and it results in a less balanced community, with more elderly people and fewer younger families. There is a very serious supply problem. Research throughout the country shows that the affordability crisis is fundamentally caused by a lack of supply; however we dress it up, that is what it boils down to. The situation is different in Southport.

Anne Main: It is not just a question of supply. In areas such as mine the average house price is 300,000 and it is not possible to build enough houses to bring prices down. Surely the hon. Gentleman agrees that we need to look at all the levers, and perhaps consider increasing the role of the rented sector. Does he agree that we cannot simply ensure that people can afford to buy houses if prices are that high?

John Pugh: I do not disagree. My argument is that the fundamental problem is the lack of supply, as my hon. Friend the Member for Hazel Grove (Andrew Stunell) said at the beginning of the debate. There are other problems, which need to be resolved, but anyone who compares the data with international data will see that the UK has a supply problem.
	In Southport, the supply problem does not relate to land. Land is available for developmentthere are big and small plotswithout encroaching on the green belt to any great extent. In fact, the causes of the problem lie elsewhere. At one time, they to some extent resided with the builders, who preferred to build luxury flats, often demolishing Victorian houses to do so, and to build for the rich and the retired, thereby bringing such people into the community. That was to some extent stopped by Government planning guidance. We now have planning restraints, housing targets and Government guidance, which we must come to terms with. Paradoxically, the problem now is the restraints and targets, coupled with a lack of support from the Housing Corporation.
	Southport is part of Sefton, which is a council with a pathfinder area in Bootle. It might plausibly be argued that my constituents could simply move south to Bootle and re-populate the city. That might seem an attractive analysis if we take the example of London, but on the ground the situation is very different. There are serious flaws in that plan, as I hope the Minister will accept. Pathfinder development has been slow and far more expensive than anticipated. As we all know, houses on whole streets that could in the past have been bought for very limited sums now cost 60,000 each. Culturally, Southport and Bootle are very different communities, and the pathfinder area and the surrounding region have their own affordability problems. That is quite apart from the question of whether my constituents could afford to travel to work in Southport, and whether they would want to uproot their children and abandon family networks. In my council area, we cannot simply expect the jobs to follow the housingthat is not plausible and it is not going to work, any more than the suggestion in the Eddington report that economic growth will follow is plausible. It is too simplistic. We need sustainable, local and subtle solutions.
	We have made some progress in getting that point across. It is certainly understood by the council and English Partnerships. The regional development agencies seem to have wised up, and the Housing Corporation has caught on. The Minister for Housing and Planning also seems to have accepted the point intellectually. There may be a few difficulties with the Planning Inspectorate, but the argument is being won.
	There is an unassailable case for less rigidity and more flexibilityfor empowering and encouraging local, sustainable and pragmatic solutions. That is the case in theory; on the ground, however, nothing very much is happening. I shall return to my constituency tonight and find tomorrow that I have the usual depressing series of cases, with often very futile outcomes.

Richard Burden: Like other hon. Members, I warmly welcome the Select Committee's report and congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) on her introduction. I add my voice to those that have emphasised the importance of the point that the report makes about the need to increase radically the amount of social rented housing units to be built in the future. Shelter has urged that for some considerable time and I am pleased that the Committee endorsed it. I know how passionately my hon. Friend the Minister feels about it and she has rightly said that it will be considered during the comprehensive spending review. I have no doubt that she will make her points during that review and it is important that the message is also sentfrom, I hope, both sides of the Chamberthat we wish to see a step change in the good work that is already being done by the Government.
	If we are to increase effectively the supply of affordable housing, it will involve a partnership between the Government, housing associations, social landlords, developers and, obviously, local government. I wish to say one or two words about the situation in Birmingham. There is no doubt, as the hon. Member for Ludlow (Mr. Dunne) said, that overall housing investment in the west midlands needs to go up, and go up radically. But I have some concerns about the policies being pursued by the current administration on Birmingham city council. That is not to say that the previous administration, which was Labour, got everything right. It did not and other hon. Members and I had criticisms of it. Some of those points were brought out in a seminal report by Anne Power, who chaired an independent commission on council housing in Birmingham. Had the Labour administration remained in power, some important progress would have arisen from that report, but sadly the present administration has decided not to take up its recommendations.
	The Conservative and Liberal Democrat coalition that now runs Birmingham does not get everything wrong, however. It does some things right, but I have major concerns in two areas and I would appreciate my hon. Friend the Minister's comments on them when she replies to the debate. The first is the approach to meeting the decent homes strategy for the city. The way in which the council is approaching that might not be sustainable and could have a detrimental impact on the supply of affordable homes in the city. The second is the council's whole approach to tackling homelessness.
	The council has based its decent homes strategy on what it calls positive retention, which appears to be financed by a rush of land sales. I hope that I am proved wrong, but it is not clear to me that the figures add up in a way that would make the programme sustainable in the medium term. That is why it was wise of my hon. Friend the Minister to advise the council, in her letter of 20 October, that she is asking officials closely to monitor the programme to ensure that it is on target and continues to be financially viable. There are some concerns that it might not be so.
	The problems extend beyond whether the figures add up. There is also a real concern that the Conservative-Liberal Democrat administration's desire to raise as much money as possible from land sales could be pushing up land prices in a way that is not necessarily helpful in promoting house building in the social rented sector and the social housing sector generally that the Committee's report recommends and Birmingham certainly needs. Another unwelcome consequence of the administration's approach is that it is centrally driven and could end up inhibiting the development of the effective community engagement and locally based housing initiatives that are so important to building mixed, sustainable and safe communities. The independent housing commission that I mentioned emphasised that approach as very important.
	We have been pioneering that approach in my constituency of Northfield on a cross-party basis and I hope that the city council does not try to stifle what is being done or subsume it into models imposed from above. I have some concerns about that because I know that my hon. Friend the Member for Birmingham, Hall Green (Steve McCabe)who, as a Whip, cannot speak for himselfhas real worries about the way in which the city council has terminated a management agreement for the largest tenant-managed co-operative in the country in his constituency. I do not dispute that there are serious allegations against that management co-operative, but my hon. Friend the Member for Birmingham, Hall Green maintains that the city has gone about trying to tackle the problem in an unacceptably heavy-handed way. Moreover, its procedural approach appeared questionable and in some cases to be contrary to the rules of natural justiceto the extent that my hon. Friend has had to refer the matter to the ombudsman and the district auditor. Once again, I hope that my hon. Friend the Minister will look at the matter in the coming period.
	Last year, I was fortunate enough to secure an Adjournment debate in Westminster Hall on Birmingham's management of its homelessness service. Local authorities such as Birmingham have Government targets to reduce the number of families presenting as homeless, but the problem that I identified in that debate was that Birmingham seemed more concerned about meeting the letter of the target than its purpose. In other words, a big part of the city's strategy appeared to be based more on reducing the number of families recorded as presenting as homeless or threatened with homelessness than on identifying the number who are in fact homeless or threatened with homelessness and helping to overcome that as well as possible.
	That approach led the council to adopt a series of what I can describe only as gatekeeping measures that made it more difficult for families threatened with homelessness to be so recorded in its figures. In the Westminster Hall debate, I drew attention to the most ludicrous aspect of the matter: even when landlords were acting lawfully in giving tenants notice to quit and the tenants involved felt that that was reasonable, the council was forcing them into unnecessary disputes and costly court actions. I pointed out that, in adopting that strategy, the council was not tackling the problem of homelessness.
	I accept that some improvements have been made since then, and that useful work has been done on an advice and referral service called Home Options that is being adopted by the council and some of its partners. The council recently nominated itself for a Chartered Institute of Housing award. It did not windespite what its press release saidbut it did reach the final shortlist.
	However, problems remain: as far as I can tell, for instance, Birmingham city council is still forcing landlords and tenants into the unnecessary and costly court procedures that I described earlier.
	There are other, more fundamental, problems. Birmingham city council still seems to think that reducing the number of families whom it allows to register as homeless or threatened with homelessness is the same as reducing the numbers who are in fact homeless or threatened with homelessness.
	Another difficulty has to do with schemes such as Home Options. Such schemes have some good points, as I said earlier, but problems arise with the highly misleading statistics that the council gives for the number of cases in which it considers a scheme has prevented a family from becoming homeless. All too often, they deal with cases that are referred by housing department staff to some other agency, either internal or external. Any such case that is not sent back to the housing department is recorded as one in which homelessness has been prevented.
	A statistic derived in that way might mean that a case of homelessness has been prevented, but it might notthe result might simply be that an applicant has joined the ranks of the hidden homeless. Housing organisations such as Shelter are aware that the hidden homeless exist, and all hon. Members know the same from their casework, but all too often those people do not show up in the statistics.
	My right hon. Friend the Member for Oxford, East (Mr. Smith) and my hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) have also spoken of the hidden homeless. I stress that I am not talking about cardboard city: I am talking about young people sleeping on friends' floors, and about families who are forced into already overcrowded accommodation with relatives, with all the stresses, strains and family breakdowns that that involves. Such cases might not show up in the statistics, but that does not alter the fact that they are real.
	Birmingham city council has just published a scrutiny report on its homelessness service, and I commend it for that. The report makes some useful points, although I hope that the council will publish the evidence on which it is based. It says that the council wants to review the situation in the coming year. I hope that the review will ask some searching questions about exactly what the statistics the council uses are based on. I ask my hon. Friend the Minister to keep a close eye on Birmingham and this issue to see whether, in reality, the claims that the council makes for itself reflect the whole picture.
	I also ask my hon. Friend at least to consider changing the target that applies to councils to one that obliges them to focus their efforts on preventing homelessness and tackling it where it is unpreventablerather than one that relies on recorded homelessness presentations, which can lead to overly restrictive definitions of what that means by particular councils and to overly restrictive definitions of what constitutes temporary accommodation. I know that organisations such as Shelter are worried about that. It is not a problem that applies only to Birmingham, but it is an issue that we need to address.
	I say those things because I think that they are necessary, but, of course, they are entirely without prejudice to my plea for more socially rented homes. However the homelessness service is managed, without the necessary supply of affordable homes, particularly in the social rented sector, we will not have the necessary properties. I hope that my hon. Friend will look closely at Birmingham. It is making some improvements, but I still have significant concernsas do othersabout the way in which the housing policy is being managed.

Paul Holmes: I, too, welcome the Select Committee report. As my hon. Friend the Member for Hazel Grove (Andrew Stunell) said in his opening comments, it is the latest in a long line of reports from all sorts of bodies that have highlighted the appalling problem in terms of affordable housing, both to buy and to rent. Like the right hon. Member for Oxford, East (Mr. Smith), earlier, I would like to focus on the part of the report that talked about the vital need for more social housing to rent to help to address those problems. That is one part of the problem. We have heard endlessly from Conservative Members about how we need to look to the private market to solve all the problems. However, social housing to rent is a crucial part of trying to deal with the difficulties.
	The lack of social housing is down to a failure to build in recent years. Unbelievably, the present Government have a worse record than the Conservative Government in terms of building social housing. For every three properties that are sold under right to buy, only one is built to replace them. That leaves a big void in the market for the poorest families, who cannot afford expensive private rented accommodation or expensive mortgage prices.

Brian Iddon: Will the hon. Gentleman admit that this Government have done far more than the Conservative Government to refurbish clapped-out stock?

Paul Holmes: The hon. Gentleman is quite correct: such money as has been spent has been focused primarily on improving old stocksadly, almost entirely to the neglect of providing new stock.
	As we heard from my hon. Friend the Member for Hazel Grove, in the last five or six years, council-house waiting lists have soared from 1 million to 1.5 million. That has a huge effect, both on the price of housing at all levels and in terms of the human cost on individuals. It puts pressure on the market price, both to rent and to buy. For example, when people look for private rented accommodation because there is no social rented accommodation, it pushes the private rents up to unaffordable levels, or allows exploitation by unscrupulous landlords. Equally, some people buy second, third or fourth properties to rent, as an investment. I seem to recall that the Prime Minister bought two or three flats in Bristol for precisely that purpose. That also drives up prices in the property market. The lack of social housing has a detrimental effect, both on private rent levels and on private house prices.

Roberta Blackman-Woods: Will the hon. Gentleman accept that the problem of a lack of affordable housing is not necessarily a problem of this Government? The Liberal Democrat-controlled Durham city council in my constituency is delivering only a fraction of the social housing that it should be delivering, because it refuses to apply its local housing policy 12 to get a development contribution from the developers. It is simply not using the means that are available to deliver social housing.

Paul Holmes: I am not sure whether the hon. Lady was in her place earlier in the debate, but we had a number of exchanges on precisely that pointthat councils have powers to require affordable housing. It can sometimes backfire when developers will not deal with those developments and properties because of those requirements.

Emily Thornberry: rose

Roberta Blackman-Woods: rose

Paul Holmes: I am not giving way, as we have already had exchanges on the subject.
	I disagree with the argument that the problem is not particularly associated with this Government. As I said in my opening comments, problems with social housing haveunbelievablybeen worse under the Labour Government over the last 10 years than they were even under the Conservative Administration, who already had a pretty bad record.
	I have highlighted problems with the level of private rents and the price of housing on the private market, but the human costfor the 30 per cent. of the population who do not own their own homes and often have no hope of doing sois so much more. My hon. Friend the Member for Southport (Dr. Pugh) mentioned constituency surgeries, and tomorrow I shall conduct my usual Friday surgery. Almost inevitably, I will hear the same stories every Friday from pensioners living in council flats or council family homes. They may have lived there for 30 or 40 years, seen their children grow up and leave, and they may have lost their partners. The house is too big, the garden cannot be maintained, yet they cannot move out. They would love to live in an old age pensioner's bungalow, but the council is not allowed to build or provide them. The next person to come along to my surgery may have a young family and live in a council flat or private accommodation that is overcrowded with children. The family wants to but cannot move into a council house and certainly cannot afford to go to the private sector. As I say, the human cost is enormous.
	I have repeatedly asked over the past five or six years: what is it about this Government, that they have such a dogmatic new Labour ideology that they oppose the principle of social housing in the form of council housing? First, in 1997, they effectively stopped council house building, and then tried to force every council in the country to privatise its council stock. More than 100 councils, including Chesterfield, have not done so, because their tenants chose democratically to stay with the council rather than privatise, but the Government are now vindictively penalising them for taking the wrong democratic choice.
	I have raised that matter twice at Prime Minister's questions, only to be told that I should celebrate choice. I do. If tenants choose to move away from the council because it is so badly runI have certainly seen badly run councilsthat is their choice. However, if tenants choose to stay with the council, as they did in Chesterfield and more than 100 other councils, their choice should be recognised and supported by a Government who claim that they support choice.
	Both Conservative and Labour Members raised the question of where the money for more social housing comes from. Let me stay with the particular example of Chesterfield, one of the 70 per cent. of councils that retain stock and are judged by the Government to be in surplus financially in respect of council houses. That is strange in itself.
	On the one hand, the Government and the Minister tell Chesterfield that it has too much money from its council rents, so some of it will be taken away to spend elsewhere. On the other hand, as we heard in respect of Birmingham earlier, the Government office for the east midlands comes along with a jackboot every two or three months, complaining that there is not enough money to bring all an area's houses up to the decent homes standard within the requisite time scale, so it has to privatise. Surely we cannot have both. Either there is too much money in the council house budget from rents, with the Government taking it away to spend elsewhereincluding on Olympic infrastructure in London under the Office of the Deputy Prime Ministeror we do not have enough money and they want to force us to privatise. It cannot be both; that is totally impossible. It has to be one or the other.

David Howarth: There is also the example of Cambridge city council. Under my leadership in the early part of the decade, it went debt free, but it is still being penalised by the Government by what is called negative subsidy, so council tenants in Cambridge have to subsidise the rest of the country.

Paul Holmes: rose

Mr. Deputy Speaker: Order. I remind the House that agreement has been achieved to divide our time between the various subjects of debate. To ensure that other subjects are adequately discussed, I appeal to hon. Members not to extend our current debate for too many more minutes, which would upset the balance of the day.

Paul Holmes: I accept your strictures, Mr. Deputy Speaker, and in view of the number of interventions that I have already taken, I shall certainly not take any more.
	Let me conclude as quickly as possible. Chesterfield council was told that it had too much money in council house rents, so in the last financial year 3.2 million14 per cent. of all the rents paid by Chesterfield's tenantshas been taken away to spend somewhere else in the country where it is desperately needed. Yet if the council privatised tomorrow, the privatised landlord could keep the money. How can it be that today the money must be redistributed elsewhere in the country, but tomorrow, under a private landlord, we could keep the lot? Chesterfield council was told that 70 per cent. of its right-to-buy receipts must be taken from it by the Government to spend somewhere else, yet if it privatised the system tomorrow it could keep all the money. How can it be that today a total of 9.2 million must be taken from Chesterfield to be spent elsewhere, includinginsultinglyon the Olympic infrastructure in London two years ago under the former ODPM, yet tomorrow it could stay in Chesterfield, with a private landlord? The situation is ridiculous.
	Why is the policy so incomprehensible and vindictive? First, there is the new Labour dogma that the public sector is bad and cannot deliver anything, as we see with Labour's increasing attempts to privatise both education and the national health service. Secondly, the root cause is the Chancellor and the public sector borrowing requirement, which was confirmed by senior officials at a meeting of the Defend Council Housing group on 21 November, attended by several Labour MPs. Only yesterday, the Chancellor was boasting about how low our PSBR is. I do not understand that claim. If public borrowing builds hospitals, schools or council housing it is debt, and therefore bad, but if it is private borrowing it is economic growth, and therefore good. The money is the same, although it costs more to borrow privately than publiclybut private is good and public is bad. That is voodoo economics of the highest order.
	Recently, localism has been a popular buzzword with both the Government and the Conservatives. If the word means anything, however, it must mean a shift in the balancefrom London to the regions and local councils. The UK, and England in particular, is the most centralised democracy in the western world: 90 per cent. of the money raised by the Chancellor, in London, is handed out with strings attached. In Scandinavia, France, Germany or any state in the USA, people would react with blank incomprehension if we described our system. They run their local services, borrowing locally, prudentially, to raise money for them. They would not understand the idea that Oslo, Paris, Berlin or Washington should tell local communities how to run their health, police, fire, housing or education services.
	In the last financial year, 9.2 million was taken from Chesterfield's council tenants. The council could be building new houses with that money and refurbishing its stock. The council could be prudentially borrowing and using rents to meet the tremendous housing needs of Chesterfield. Under a local system, Birmingham, Southport, and all the other places we have heard about that are in the same position, could meet local needs. Will the Minister explain why a Labour Government continue vindictively to penalise and punish people in Chesterfield, which is primarily a poor working-class community?

Michael Gove: May I begin by thanking the hon. Member for Chesterfield (Paul Holmes) for his speech? When the right hon. Tony Benn stood down as Member for that constituency, many of us felt that something would be missing from the House, but I am delighted that the spirit of Bennism is alive and well in Chesterfield. As the hon. Gentleman was speaking, I was looking at the hon. Member for Yeovil (Mr. Laws), the standard-bearer of economic liberalism in his party, and saw a frown pass across his featuresI can quite understand why.
	I thank the hon. Member for Milton Keynes, South-West (Dr. Starkey) for the masterly way in which she summed up the views of her Select Committee. She chairs it with grace, and the degree of work that she has put into the subject and the attention she gives it reflect her lifelong commitment to dealing with questions of local government and housing. Conservative Members do not share all her analysis or all her prescriptions, but we are grateful to her and her Committee for their work.
	The high standard of the hon. Lady's speech was reflected in almost all the contributions on both sides of the House. The hon. Members for North Swindon (Mr. Wills), for Regent's Park and Kensington, North (Ms Buck) and for Birmingham, Northfield (Richard Burden), the right hon. Member for Oxford, East (Mr. Smith) and the hon. Member for Stroud (Mr. Drew) each drew attention in their remarks to the problems faced by their constituents. They did so with eloquence and passion. No less eloquence and passion was displayed by my hon. Friends the Members for Ludlow (Mr. Dunne) and for Hammersmith and Fulham (Mr. Hands), who also pointed out the vital importance of increasing housing supply, in particular to deal with the needs of the vulnerable.
	Sometimes, Labour Members have allowed their Olympian objectivity to lapse and have sought to caricature the Conservative party as restrictionist on housing supply. Any fair-minded observer who had heard the contributions made by my hon. Friends would be in no doubt that we are the party of increasing housing supply and helping the vulnerable.

Sadiq Khan: On that point, will the hon. Gentleman explain why, in the past Session, he signed early-day motion 519, which opposed new homes in Surrey?

Michael Gove: The hon. Gentleman once again shows his attachment to the parliamentary Labour party briefhe would be lost without it. I am proud of the early-day motions that I have signed. That particular early-day motion expressed concern about the insensitivity of development.
	I have had a meeting with the Minister for Housing and Planning to draw attention to the lack of development in my constituency. I asked her to take action to deal with the problem caused by the way in which Natural Englandformerly English Naturehas instituted a moratorium on all residential development in my constituency. I want a bipartisan consensus on lifting that moratorium. When the Minister makes her speech, perhaps she will turn her attention to what the Government are doing to jolly along Natural England, which is one of their quangos, to ensure that there is more house building in my constituency. In a Westminster Hall debatesadly, the hon. Member for Tooting (Mr. Khan) could not be presentI called on the Under-Secretary of State for Communities and Local Government, the hon. Member for Sheffield, Heeley (Meg Munn), to press the Minister for Housing and Planning to find out what could be done to ensure that there was more house building in my constituency and neighbouring constituencies. I await the Minister's comments with interest.
	As the debate has demonstrated, there is a widespread consensus in the House that we need to increase housing supply, not least because projected future household growth outstrips the growth in new housing completions. That is a problem both for those who want to own and those who want to rent, whether that is in the private or the social sector. For those who want to own, the price of the average house is such that both partners in any relationship would need to earn more than the national average wage of 24,000 to have even a chance of getting on the housing ladder anywhere in the country.
	As many hon. Members have acknowledged, we have a problem with social housing. The Chancellor has indicated that when it comes to the comprehensive spending review, he might turn from the clunking fist into Father Christmas. However, as several hon. Members have pointed out, the Government should not be over-proud of their record on social housing. Some 94,000 people are in temporary accommodation today, but the figure was half thatonly 41,000in 1997. The Chancellor has a target of halving the number the people in temporary accommodation. That is an admirable goal, but if it is met, we will only be back to where we were when this Government took over.
	The number of social housing completions has been consistently lower under this Government than it was under the last. I admit that housing policy was never perfect under previous Administrations. However, even in the 1990s, the number of social housing completions under all Conservative housing Ministers ran at between 23,000 and 30,000. The figure has never reached that level under this Government; it has ranged between 18,000 and 13,000.

Nick Raynsford: As part of the hon. Gentleman's review of housing policy, will he reflect on the legacy that the Conservative Government left behind in the form of a 19 billion backlog of disrepair in the existing social housing stock? Does he seriously think that it would have been responsible for the incoming Government to build new, rather than repairing the derelict properties that we inherited from his party?

Michael Gove: The right hon. Gentleman is a former Minister for Housing and Planning, and I pay respect to the thoughtful way in which he has dealt with the subject. The decent homes standard has played a significant part in improving stock across the board. However, increasing supply is one of the key things that the Chancellor and the current Minister for Housing and Planning have put at the heart of their policy. I regret that the focus on improving housing standards was at the expense of increasing supply. It is only now that the Government are playing catch-up with the estimable record of the Conservative Government.

Andrew Slaughter: rose

Michael Gove: I must try to make progress, given the time constraints that we face.
	As well as discussing social housing, it is appropriate to acknowledge that the Government have put a great deal of emphasis on low-cost home ownership schemes. We heard an entertaining exchange between the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter) and my hon. Friend the Member for Hammersmith and Fulham about low-cost home ownership and some of the strikingly high-cost schemes that sail under that banner.
	The Government's record on low-cost home ownership schemes is disappointing. Yesterday, the Chancellor announced with a fanfare that he wished to double the number of those taking advantage of shared ownership to 160,000. I do not know where he got those figures from, but it was clearly not the Department for Communities and Local Government, because according to answers from the Department, the number of homes sold under the Minister for Housing and Planning's own social homebuy scheme in September was just one. By November, that had increased dramatically to five. I congratulate the Minister on that 500 per cent. increase. I am concerned, however, because the Housing Corporation allocated 15 million of public money to the scheme. Never in the field of house building has so much been spent so badly to provide ownership for so few. The Government's failure, both in respect of that scheme and in so many other areas, is no accident, nor is it the consequence of neglect.

Andrew Slaughter: The hon. Gentleman, whose attitude is always refreshing, seems to be in favour of meeting housing need, and he rather casts aspersions on home ownership. He talked about people on waiting lists, overcrowding and people in need, but does he accept that most of those people will need social rented housing? I ask him the same question that I put to the hon. Member for Hazel Grove (Andrew Stunell): does he agree with the Mayor of London's target of 50 per cent. affordable housing, 70 per cent. of which should be affordable social rented housing? Will the hon. Member for Surrey Heath (Michael Gove) disassociate himself from Tory councils such as Hammersmith and Fulham, which say exactly the oppositethat wherever there is an opportunity, housing should be for sale, not for rent?

Michael Gove: Invited to choose between the Mayor of London and Conservative-run Hammersmith and Fulham council, I shall side with Hammersmith and Fulham, not just because its mandate is fresher and more resounding, but because one reason for the failure at the heart of Government policy is their over-reliance on targets. I mentioned that the Government's failure was no accident, and was not the result of conscious and amoral neglect, but springs from a philosophical and ideological problem: the Government centralise and micromanage, and they have too much of a statist approach to every aspect of policy. The same clumsy clunking fist that is responsible for failure in other areas is responsible for the failure in housing.

Andrew Pelling: Does my hon. Friend note the fact that the Mayor of London does not set 50 per cent. targets across London, as he recognises that there should be a degree of flexibility? It is the lack of flexibility in the Government's approach of setting national targets, and targets for units in areas of social housing, that has resulted in a huge shortagea crisisin the supply of family housing.

Michael Gove: My hon. Friend makes an excellent point. One of our key problems is the national criteria, which do not take account of specific local factors. There is a lack of family homes, and an over-supply of flats in comparison with family homes, not just in London but further afield. On previous occasions in the House my right hon. Friend the Member for Penrith and The Border (David Maclean), and the right hon. Member for Berwick-upon-Tweed (Mr. Beith), have pointed out that there is, effectively, a moratorium on development in their areas, because housing targets for their regions have been met, and the targets are treated as ceilings, not floors. One of the unfortunate consequences of the regional spatial strategies over which the Minister presided is that many communities that wish to expand and to build new housing, both market and affordable, in order to keep the community sustainable, are prevented from doing so. Essentially, national and regional policy has restricted growth in areas where it is genuinely popular.
	I recognise that there is some resistance to house building in certain parts of the country, but I submit that the right thing to do is to operate by consensus rather than confrontation; that is always the right way to proceed. I notice that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) is smiling. May I remind him of what he wrote in a recent article entitled Decent Homes in a Sustainable Environment: Priorities for Labour Policya title that clearly suggests that, under this Government, we have had neither decent homes nor a sustainable environment? He points out that
	indiscriminate and indifferently designed greenfield developments of low-density executive houses gave the English language the memorable phrase 'concreting over the countryside', and fuelled an anti-housing backlash.
	In a context where performance was judged by numbers, quality was the obvious casualty while sustainability and energy efficiency rarely if ever got a look in.
	The right hon. Gentleman's critique of his Government's policy was prefigured by the comments of the Leader of the Opposition.

Nick Raynsford: rose

Michael Gove: The right hon. Gentleman is eager to speak. How can I resist?

Nick Raynsford: If the hon. Gentleman did a little more research, he would discover that I was referring specifically to the house-building trends of the 1980s and early 1990s, following the policies adopted by the Conservative Government, who provided a free-for-all for indiscriminate greenfield development at very low density.

Michael Gove: I am afraid that the right hon. Gentleman's words accurately describe the Government's policy, because he rightly drew attention to increased resistance to development in some areas. Whatever measure of public opinion we use, resistance to new housing development has grown since the Conservatives were in office. As I pointed out, although there might have been flaws with past policy, they have increased and worsened under the Government. Much as he tries to do so, the right hon. Gentleman cannot rewrite history, or eat his own words. The cap fits the Ministers whom he is compelled, however reluctantly, to support.
	If we are to build an enduring consensus on the housing supply, we must consider four factors that have increased resistance. People are concerned about the lack of infrastructure for new housing development; they are concerned, as the right hon. Gentleman pointed out, about the aesthetic quality of new development; they are concerned about the environmental impact of new development; and they are concerned, too, that new development will be accompanied by additional costs, but not additional benefits. On infrastructure, proposals have been introduced for a planning gain supplement. I hope that the Minister will enlighten us and explain how benefits from the PGS will be split. Will the PGS, as Kate Barker suggested, be an entirely hypothecated tax so that benefits will go to the communities where new developments are built? A simple yes or no will suffice, because local communities want a guarantee that they will receive the cash that they need.
	I echo the words of the right hon. Member for Greenwich and Woolwich, and of the Prince of Wales, who pointed out we can overcome resistance with improved design and by working with communities. The Prince of Wales's affordable rural housing initiative has resulted in successful housing developments of the highest quality that are not resisted but welcomed by communities. What is the Minister doing to improve design quality? As for the environment, yesterday the Chancellor discussed his proposal to exempt new carbon-zero homes from stamp duty, but on last night's edition of Newsnight the Chief Secretary to the Treasury said that fewer than two dozen homes, on one development, meet that criterion.  [ Interruption. ] The new incentive will be removed, the hon. Member for Eltham (Clive Efford) will be interested to know, after just three years. Will the Minister use her formidable skills of persuasion to bend Treasury Ministers to her will to ensure that we apply genuinely environmentally friendly taxation and regulation to new housing development?
	Finally, on the question of incentivising house building and working with local communities to ensure that they welcome the house building that many enlightened civic leaders accept is necessary, I hope that the Minister will add her voice to those calling for publication of the much-delayed Lyons review, so that we can discover what appropriate local government finance incentives we can use to encourage house building. Sir Michael Lyons has laboured long in the vineyard, but yesterday, I am afraid, the Chancellor told us that we would have to wait another few months before his report was published. Why on earth the Government are scared of the subject of local government finance, I do not have the faintest idea, but I look forward to hearing from the Minister.

Yvette Cooper: May I congratulate my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) and her Select Committee on an extensive and weighty report that raises a series of important issues? It is testament to the significance of those issues that many Members have attended our debate.
	Hon. Members will be aware that since 1997, we have had low mortgage rates compared with those of past decades, and greater economic stability, in contrast to earlier housing market crashes, which has made it possible for far more people to become and remain home owners, rather than face the repossessions that took place in the past.
	The report also makes it clear that we face serious pressures from rising house prices across the country and that there is a serious underlying need to build more new homes for the future, so that the next generation can have homes as well.

Clive Efford: I commend to my hon. Friend the report published this week by Shelter, Against the Odds, which highlights the fact that 1.6 million children are living in bad housing. The consequences for those children are that they are twice as likely as other children not to have GCSEs when they leave school; they are twice as likely to be excluded; they are five times more likely to have nowhere to do homework; and they are three times more likely to experience poor health in their lifetimes. Those children pay with their lives for poor quality housing, and if we do not deal with the issue in the next comprehensive spending review, the problems will continue. Will the Minister urge my right hon. Friend the Chancellor to tackle that particular issue in the comprehensive spending review, because there is a growing crisis that we have failed to address in the past 10 years?

Yvette Cooper: My hon. Friend is right to draw attention to the extremely important Shelter report, which shows the significance of housing in people's lives. We have lifted almost 1 million children out of bad housing as a result of the decent homes programmemany children used to live in unacceptably bad council housingbut he is right that we need to build more homes, which means more social housing, more private housing and more shared ownership homes, if we are to address the needs of young children, who need better housing for the future.

Andrew Love: One of the issues raised in the report is the priority given to finance for affordable housing compared with finance for low-cost home ownership. Will my hon. Friend make a commitment that both matters will be accorded a similar priority in the comprehensive spending review?

Yvette Cooper: The Chancellor has said that social housing needs to be a priority in the comprehensive spending review. I think that we need more shared ownership housing, too. The shared equity task force report, which was published yesterday, sets out better ways in which to bring more private sector investment into shared ownership schemes, which will give us the opportunity to concentrate public sector investment increasingly around social housing.
	That is an area of contrast between the parties, because, as my hon. Friend may be aware, the shadow Chancellor said in February that increased shared ownership should be funded from some of the Government money that is going into social housing. I disagree with that, because I think that we need more social housing and more shared ownership. We should not reduce social housing in order to deliver the shared ownership that we need.
	Demand for housing has grown steadily, and the house building industry has failed to respond. Over the last 30 years of the 20th century, the number of households increased by 30 per cent., while the level of new house building fell by 50 per cent. The figures that we have set out for the future suggest that if we continue with the rate of house building over the past few years, the proportion of 30-year-old, two-earner households able to afford their own home on the basis of their earnings will drop from more than 50 per cent. today to nearer 30 per cent. in 20 years' time, which is simply unsustainable. It would be unfair to deny future generations the opportunity of home ownership, which previous generations have had. In that circumstance, many of those people would still have the chance to get on to the housing ladder, but only because of gifts or inheritance from parents or grandparents, and it would be unfair if someone's chance of becoming a home owner were to depend on whether their parents or grandparents were home owners before them. That is why the Select Committee report is so important.
	It is interesting that many hon. Members on both sides of the House have discussed the need to build more homes, which is very new. I remember the debates on the issue 12 or 18 months ago on the Floor of the House and in Westminster Hall. We were arguing for far more houses, but Opposition Members told us that there was no need for new homes and that we did not need the Barker recommendations.
	I think that we need to build more homes. We have already increased the level of house building from 130,000 new homes four years ago to nearly 170,000 new homes last year.

Andrew Slaughter: I am delighted to hear what my hon. Friend says. Several hon. Members have mentioned the Shelter report. Will she look again at the persuasive case that it makes for an additional 20,000 affordable rented homes? Will she consider the whole issue of affordability, given that rented homes are the only possibility for many people in housing need? In view of the remarks by the hon. Member for Hammersmith and Fulham (Mr. Hands), will she consider the fact that shared ownership housing must be affordable? It currently stands at 60 to 70 per cent. of market price, which is not affordable to anybody in housing need if market prices are in the range of 800,000, as in Hammersmith and Fulham.

Yvette Cooper: My hon. Friend is right. I shall say more in a moment about the need for more properly affordable social and shared ownership housing.
	On the overall level of house building that is needed, we believe, given the growing number of households with people living alone and an ageing population, that we should be building at least 200,000 new homes a year. The Select Committee said in its report that we should go further. Conservative Members have continued to refuse to say how many new homes they think should be built. Indeed, the hon. Member for Meriden (Mrs. Spelman), when challenged, has repeatedly denied herself the opportunity to say whether she agrees with or supports the 200,000 new homes that we suggest, although she has said:
	We need to build more houses, but not on the scale that Barker recommended.
	I know that the hon. Member for Surrey Heath (Michael Gove) is never coy, and I am sure that he would love to take this opportunity to join the consensus in the House and tell us how many homes he thinks are needed for the next generation and how many he thinks we should be building a year.

Michael Gove: rose
	Hon. Members: Hooray.

Michael Gove: It is an intoxicating pleasure for me to get a cheer from the Labour Benches when I rise; I hope that it will not be the last occasion.
	I think that Miss Barker's estimate of 200,000 is a fair estimate of the level of potential future housing need, but I would not like our ambitions to be limited by that target, because I fear that, as has so often happened in the past, targets can distort delivery. Miss Barker's work has been useful, but I do not want us to be tied down by any arbitrary target. We should respond to local need instead of being bound by a specific national straitjacket.

Yvette Cooper: I interpret that to mean that the hon. Gentleman does indeed think that we should probably be building somewhere in the region of 200,000 new homes a year but needs to give himself a little wriggle room in case he comes under pressure from his boss, the hon. Member for Meriden, who has opposed the level of building that we suggest. Clearly, hon. Members take different views on this; certainly, the hon. Members for Surrey Heath and for Meriden have done so, as they are welcome to.

Michael Penning: I oppose the house building that the Government propose in Hemel Hempstead on the site of the hospital that they are closing.

Yvette Cooper: I cannot comment on the individual site that the hon. Gentleman mentions. It is true, however, that Conservative Members from all parts of the country are continuing to oppose increased housing in their areas at a time when 45 towns and cities have come forward just in the past 12 months to say that there should be significant increases in new homes in their areas, and regional assemblies across the country are proposing increased house building. As the hon. Member for Southport (Dr. Pugh) said, this affects not only London and the south-east but areas such as the north-west, the north-east, and Yorkshire and Humberside. We should be building additional homes in every part of the country. It is a shame that the only regional assembly to propose cuts in the level of house building is the Conservative-led south-east regional assembly.

Sadiq Khan: Speaking of nimbyism, Wandsworth council is discharging its responsibility for providing affordable units by providing studio flats costing 325,000. Will my hon. Friend agree to meet my hon. Friend the Member for Battersea (Martin Linton), members of the Wandsworth Labour group and myself to discuss the unique problem of how Wandsworth discharges its responsibilities?

Yvette Cooper: I would be happy to meet my hon. Friends and I am sorry to hear about their difficulties. We expect local authorities to take seriously the need for affordable housing that is genuinely affordable in their areas.
	I should like to deal briefly with some of the other points that the Select Committee raised and that were mentioned in the debate, especially climate change and the way in which we ensure that, as we build the additional homes that we need for the future, they are properly sustainable for the next generation. That means that we must build to much higher environmental standards. The Committee highlighted that and referred to the need to improve the code for sustainable homes. We are doing that and we will publish it next week.
	We shall also publish a new planning policy statement on climate change as well as the revised code for sustainable homes. We will set out a timetable to introduce the code standards into building regulations, as the Committee suggested, to achieve the targets that the Chancellor set so that, in 10 years, all new homes should be built at a zero carbon rating. No other country has set that sort of timetable or ambition but I believe that we need to do it to drive the environmental technologies of the future and ensure that we are building the homes of the future.

Mark Lazarowicz: I am glad about my hon. Friend's announcement about the sustainable building code and yesterday's announcement about the zero rate of stamp duty land tax to encourage such development. That is especially pleasing because the policy would apply throughout the UK. Yesterday's announcement also referred to measures to encourage energy audits and loans to allow people to carry out work in their houses. As energy and housing

Mr. Deputy Speaker: Order. I have previously appealed for brief interventions. Long interventions rob time from the second debate, in which a great many hon. Members, even on the hon. Gentleman's side, wish to participate.

Mark Lazarowicz: I should be grateful if my hon. Friend commented on the implications for Scotland as well as England and Wales.

Yvette Cooper: My hon. Friend is right that we need to work on carbon emissions from existing homes as well as new homes. We are already investing in Warm Front and we want to expand the programme to improve existing homes.
	The announcements next week will be primarily about new homes but in the new year we want to take forward further work on existing homes, too. Last week, we published a new planning policy statement on housing, which responds to many issues raised by the Committee and in the debate.

Emily Thornberry: Will my hon. Friend join me in condemning the Liberal Democrat council in Islington for refusing once more to set a target for the overall amount of affordable housing to be provided in Islington, despite the publication of the new planning policy statement? I refer to a council meeting that took place two days ago.

Yvette Cooper: We expect local authorities to start responding to the new planning policy statement on housing. They will need to take account of it in developing their new local development frameworkstheir local plans for their area. My hon. Friend has raised the matter many times and we have set out the need for councils to consider asking for affordable homes on smaller sites, not simply on large sites, where that is viable and housing is needed. We should try to provide more affordable housing through the planning system. Some research suggests that two thirds of homes are currently built without any contribution to affordable housing. That is why we have made it clear in the new planning rules that more should be done throughout the country to achieve the goal.

Anthony Steen: I need some clarification to help me understand something. The Minister talks about affordable homes. Does she mean subsidised homesthose that are subsidised by the public and private sectors? If so, why does she keep calling them affordable? They are not affordable.

Yvette Cooper: I suggest that the hon. Gentleman examines the new planning guidance that was published last week. It clearly sets out what we mean by affordable housing. We use the term to mean subsidised shared ownership schemes and social rented housing. However, they could be subsidised purely by planning gainin other words, by the private sectoror by the public sector. We have changed the definition in the new planning guidance to concentrate more on schemes that are genuinely affordable rather than allowing developers to describe low cost home ownership schemes, which are simply smaller, market properties, as affordable when, in many cases, in practice they are not.
	Hon. Members have talked about the need for more social housing, and we take that matter very seriously. I want to make it clear to those hon. Members who mentioned investment in existing homes as well as in new homes that we will have invested 40 billion by 2010 in improving council homes and social housing across the country. That includes a more than 30 per cent. increase in funding going directly to councils. The hon. Member for Chesterfield (Paul Holmes) expressed concern about direct funding to councils; we have increased it by 30 per cent. in real terms to help them to improve their council housing stock. We are also going further with arm's length management organisations and other stock transfers.
	I have to say, however, that if we had not inherited council homes that were in such a shocking state of disrepair in 1997, with more than 2 million families living in homes that did not meet basic standards of decency, we could have spent a hefty chunk of that 40 billion on new social housing. The shocking legacy of the 1980s and 1990s under the Conservatives is still being felt right across the social housing sector.
	We need to go further by investing in more social housing, and we have said that that will be a priority for the spending review. We also need to look at ways of levering in additional resources through planning gain. We take seriously the need to look at all aspects of improving housing. My hon. Friend the Member for Birmingham, Northfield (Richard Burden) raised specific issues relating to Birmingham, and we are making clear to Birmingham the importance of its demonstrating that its approach continues to be sustainable.
	There needs to be more shared ownership, and we are increasing to 160,000 the number of families who can be helped into shared ownership, including key workers and other first-time buyers, partly as a result of levering additional private sector investment into shared ownership schemes. My hon. Friend the Member for Regent's Park and Kensington, North (Ms Buck) raised the issue of temporary accommodation. She will be aware that we have set up a scheme to start buying back social housing, funded by savings from housing benefit. Clearly we also need to ensure that we provide the billions of pounds needed for infrastructure. We are already doing that across the Thames Gateway, and we are consulting on ways to raise this further.
	Members have raised particular issues relating to family homes. The new planning guidance clearly states that we need more family homes, and that we need to concentrate more on the needs of children, who have different needs from the rest of us in terms of gardens, parks and play areas. We need more family homes in our cities, where we often see a great deal of investment in flats but not the additional investment that we need in family homes.
	We recognise that Conservative Members have taken different views on this matter in the past. A recent edition of  Inside Housing carries a fetching photo of the hon. Member for Surrey Heath, alongside his suggestion, Let's build on farmland, rather than in towns and cities. In the same article, however, his boss, the hon. Member for Meriden is quoted as saying:
	Every sod of turf torn up from a greenfield site to make way for new housing development is an indictment of the government's failed housing policy.
	In response to that, even the Campaign to Protect Rural England said:
	Who is controlling Conservative policy? Who indeed?
	Perhaps it is the right hon. Member for Witney (Mr. Cameron). Speaking to the Conservative party conference, and claiming to represent the next generation, he said:
	We are to be the party of aspiration. And that means building more houses and flats for young people.
	However, speaking to Age Concern just three weeks later, he said:
	We need to change the planning rules so that we get fewer small flats and...fewer homes designed for young, single people.
	That represents a complete flip-flop in the space of just three weeks. The hon. Member for Surrey Heath might not agree with his boss, but his ultimate boss, the right hon. Member for Witney, does not even agree with himself.
	We have made it clear that we need to build more homes for the next generation; we agree with the Select Committee report on that. We only hope that Conservative Members will demonstrate a little more consistency in supporting us as we build the new homes that the next generation needs.
	 Question deferred, pursuant to Standing Order No. 54, (Consideration of estimates).

Occupational Pensions

[Relevant documents: Sixth Report from the Select Committee on Public Administration, Session 2005-06, The Ombudsman in Question: the Ombudsman's report on pensions and its constitutional implications, HC 1081, and the Government's response thereto, Cm 6961; and Sixth Report from the Parliamentary and Health Service Ombudsman, Session 2005-06, Trusting in the pensions promise, HC 984, and the Government's response thereto.]
	 Motion made, and Question proposed,
	That, for the year ending with 31st March 2007, for expenditure by the Department for Work and Pensions
	(1) further resources, not exceeding 782,539,000, be authorised for use as set out in HC 2,
	(2) a further sum, not exceeding 517,523,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and
	(3) limits as so set out be set on appropriations in aid. [Liz Blackman.]

Tony Wright: I am glad to have the opportunity to introduce the recent report of the Public Administration Committee on occupational pensions following the report of the parliamentary ombudsman earlier this year. I pay tribute to my colleagues on the Committee: it is a great privilege to work with them, and I thank them for what they do to enable the Committee to function as it does. I also pay tribute to both the office and the officers of the parliamentary ombudsman, who have served this Parliament with distinction and continue to do so.
	It is almost 40 years since Parliament decided to establish the office of ombudsman, which was then called the parliamentary commissioner for administration. We will mark the 40th anniversary in April next year. The original legislation, the Parliamentary Commissioner Act 1967, contained a provision allowing the ombudsman to report to Parliament in cases in which maladministration leading to injustice had been unremedied. That sensible provision enabled Parliament's attention to be drawn to what were believed to be the exceptional circumstances in which a finding of maladministration leading to injustice had remained unremedied by the Government of the day.
	We are dealing with what is only the fourth occasion in 40 years on which the parliamentary ombudsman has had to use that provision to report to Parliament. It is the first timethe only time; the unique timethat a case has arisen in which not only has the finding of maladministration been rejected by the Government of the day, but the injustice has remained unremedied. Both components of the ombudsman's work have been set aside: the finding of maladministration and the description of how it might be put right. It is an important moment for the House when Parliament's ombudsman is in such a position over an issue of this kind.

Frank Field: Does my hon. Friend share my surprise, and that of others, at the Government's over-reaction? In asking What must we do now to make good the shortfall in pensions?, the parliamentary ombudsman merely requested that the best brains should be put together to try to come up with a better scheme. Given what some of those observing our debate would consider to be the mildness of that recommendation, was my hon. Friend as surprised as I was at the Government's excessive response?

Tony Wright: I was surprised and disappointed, as no doubt was the ombudsman, by the way in which her report was immediately set aside. I think she was particularly troubled by the fact that, in her view, the report had been misrepresented. She had not said to the Government, You must sign a blank cheque straight away: that will take care of it. However, I think she was even more upset by the rejection of her finding of maladministration.
	The whole point of the ombudsman system created 40 years ago by this House of Commons was to establish an independent person to decide whether there had been maladministration on the part of a Department or body. The decision would be transferred from the normal exchanges to an arena in which someone could make it independently, which is what the parliamentary ombudsman has done.
	We must not forget what this involves. More than 100,000 peopleand many of us have constituents in this positionhave lost some, or in a number of cases all, of the occupational pensions that they believed to have been secured. In human terms, that is what we are talking about. Many of us will know the real human stories behind the figures, the real human consequences as well as the financial loss, and the stress and health issues that have arisen from people seeing their pension, and therefore their ability to support families and to contemplate a decent retirement, disappear.
	The argument centres on the question of liability. Again, to respond to my right hon. Friend the Member for Birkenhead (Mr. Field), the point is not that the ombudsman said that the Government had sole responsibility for what had happened. What was affronting was the proposition that the Government had no responsibility for what had happened. Whichever way we look at the evidence, which has been pored over endlessly by the ombudsman, our Committee and others, there can be no question but that there is a liability. There is some maladministration.

Kitty Ussher: I am listening to my hon. Friend's comments with extreme interest and some concern. Please will he clarify whether it is just this Government who are criticised, or whether the previous Government also come under criticism for the period between 1995 and 1997?

Tony Wright: I am grateful for that point, which I was going to make towards the end of my remarks, but which I will make now. The reason that the issue should concern us all is that it involves this and the previous Government. It flows from the Pensions Act 1995 following Maxwell, and the protections that were supposed to have been put in place then. Although, of course, my comments are necessarily critical of my Government's response so far, I also note that the Conservative Opposition have said that they are not prepared to spend an extra penny on helping such people. This is a House of Commons matter. It affects both major parties, and we both have an obligation.

Nigel Waterson: I did not want to interrupt the hon. Gentleman's flow, as he is doing extremely well, but it would not be fair to characterise the Opposition's position in that way. I will develop that point later. Will he also clarify, however, that the minimum funding requirement, as set out in the 1995 Act, was weakened on more than one occasion under this Government?

Tony Wright: I wanted to come to that point, which concerns liability and the denial on the part of Government, in their response to the ombudsman and to the Committee, of all liability in this area. The ombudsman herself explains most effectively why that cannot be right. First, she says,
	Government was responsible for establishing the legal framework governing both the regulation of the occupational pension system and also the funding framework relevant to each individual scheme.
	Secondly, she says,
	Government decided to design a system that would provide non-pensioner scheme members with only a 50 per cent. chance of securing their pension contributions if their scheme wound upand took other policy decisions which directly affected the financial stability of schemes.
	Thirdly, she says,
	Government was responsible for approving the actuarial basis of the level at which each scheme had to be fundedand reduced that level twice.
	Fourthly, she says,
	Government designed a priority order which over-rode the discretion of trustees to apportion the assets of schemes fairly between all the members of a scheme in wind-upand gave itself and financial institutions higher priority than pension schemes when the assets of insolvent employers were distributed. Public bodies thus received a proportion of the assets of insolvent companies that was denied to those companies' pension schemes.
	And fifthly, she says,
	Government prescribed what trustees had to tell scheme members about their pensions through what were known as the Disclosure Regulations. The Government decided that this should not include issues of risk.

Andrew Miller: Did my hon. Friend's Committee probe the ombudsman on why she did not look back to the short-termist approach that was developed in the Finance Act 1986, when caps were effectively imposed on surpluses? That was desperately short-termist and it has given rise to many of the problems that we face today.

Tony Wright: I am sure that there are many issues that provide context and background to what we are talking about. What I am identifyingas the ombudsman has doneis a direct set of public responsibilities. This answers the question about whether these were simply private schemes. They were private schemes, but they were private schemes that sat within a framework of regulation.

Mark Todd: I am intrigued by my hon. Friend's reference to risk. I am sure that he is right that the Government did not prescribe that scheme trustees should advise their members on risk, but he phrased that remark in such a way that it implied that they were advised that they should not describe the risk of their schemes or any issues relating to that. I am a member of a scheme, and I can remember being advised by trustees of risk issues relating to it. Is my hon. Friend not mistaken in the way he expressed that point?

Tony Wright: I was trying to sayagain, this has been exhaustively analysed through the literature that was put out in relation to the protection frameworkthat there was no identification of the risk attached to the schemes on wind-up despite the fact that we now know that there was such a risk. That is clearly an admission.

Adrian Bailey: I have listened carefully to my hon. Friend's arguments, but it seems to me that in order to come to the conclusion that he has reached it is necessary that there be some causal link. Let me refer to a response by the ombudsman while giving evidence to my hon. Friend's Committee. The ombudsman said that the causal argument is not in the report, and that the report does not say that the maladministration that has been talked about in terms of the leaflets caused the financial losses. Therefore, it seems to me that there is a recommendation advocating compensation while there is also an acknowledgement that the Government leaflets that are supposedly the basis for the argument did not cause the losses.

Tony Wright: I think that there has been a misunderstanding that somehow this argument is about leaflets. I have not even mentioned leaflets yet. So far, all I have said is that the occupational pension schemes that operated during the period in question operated within a regulatory framework that had been set up through the Pensions Act 1995, and that from that certain implicit guaranteesand in some cases explicit guaranteeshad been given to people post-Maxwell about the safety of those schemes. Indeed, words such as safe and guaranteed, and phrases such as protected by laws, were frequently used.

Robert Flello: I wish my hon. Friend to explain something. Given that the trustee has a fiduciary duty generally to explain matters such as risk, just because it was not explicitly put out that they are required to do so

Mr. Deputy Speaker: Order. It is a courtesy to address the Chair andmore importantly, and from a practical point of viewto address the microphone.

Robert Flello: I am grateful for that, Mr. Deputy Speaker; I fear that I must find a better place to sit.
	Even though it might not have been specifically stated in guidance whether it was post-1995, does not a trustee have a general responsibility, indeed a fiduciary responsibility, to explain all levels of risk in any case?

Tony Wright: Again, the evidence available to trustees has been exhaustively analysed. We took evidence from trustees, and it was clear from the advice that they were given that the schemes were entirely safe. There can be no dispute about what was said about the regulatory framework.
	On the information that was given out, Members need to understand that the ombudsman is charged with deciding whether there has been maladministration. She took the Department for Work and Pensions' commitment to the quality of information that it puts out and tested what happened in this case against its own standard. On the back of inherited SERPS and all that flowed from thatas Members will recallthe DWP described its commitment to information. It said that it would be
	accurate and up-to-date with no significant omissions.
	That takes us back to the question of risk. On the basis of advice given to it by its lawyers, it also said that
	where we choose to give information it is incumbent on us to ensure it is accurate, complete and can be relied on.
	That was the DWP's own test, which it applied to its own information, and the ombudsman looked at the information put out about these schemes and their regulatory framework in relation to that test.

David Taylor: My hon. Friend is right to paint a picture of employees in the post-Maxwell era losing faith in their employers and, to an extent, in their trustees; of course, the same was also true of the post-pensions mis-selling era. However, were residents of North-West Leicestershire who were in the collapsed British United Shoe Machinery scheme not entitled to rely on information that was described in the initial leaflets as impartial information? The then Government
	told Parliament and the public in its consultations that it had produced materials to help inform members of the benefits 'and risks' from a source they could trust.
	Surely that was the lifeline that was thrown to many people, which disappeared beneath the waves.

Tony Wright: Indeed it did, which is why, when the Government responded to what the ombudsman had said about their failings on the informational front, she was disturbed by the nature of that response. She said in her memorandum that it simply reinforced her finding
	that official information provided about the security of pensions was inaccurate, incomplete, inconsistent or unclear.
	She gives a concrete example that is worth attending to. She says:
	In paragraph 22.1 of the Government's response
	to her report
	the Government refers to a leaflet issued in January 1996 as being 'only a brief summary of the changes' introduced by the 1995 Act and notes that that leaflet dealt with the MFR 'in just four sentences'.
	Yet, as my report shows, that same leaflet began by saying that these changes, including the development of the MFR, had been introduced as 'the Government wanted to remove any worries people had about the safety of their occupational...pension following the Maxwell affair'. It then went on to state (with emphasis added) that 'the minimum funding requirement is intended to make sure that pensions are protected whatever happens to the employer'.
	As the ombudsman says,
	That was not true.
	This leaflet may well have given only a brief summary of the changes introduced by the 1995 Pensions Act; it may also only have dealt with MFR issues in four sentences. Yet it did both inaccurately.
	Given the stated aim of the reforms it was describing and the context in which it was published, the leaflet's brevity cannot excuse its material inaccuracy.

Jim Devine: Is my hon. Friend aware of the Government's response to the ombudsman, who has not allowed us to see the full actuarial advice on which some of her comments were based? That means we cannot challenge how she arrived at some of her conclusions. Will he comment about the proposed 15 billion cost of putting right that wrong and has he had a chance to look in detail at the figures?

Tony Wright: My understanding is that the ombudsman has said that, if necessary, she can supply the actuarial basis. I shall say something about cost in a moment.
	The conclusion that I have reached so far is that the Government set up the framework of protection, after Maxwell, in the 1995 Act and then issued information about it. Those are the two bases on which people can legitimately say that they have been let down.

Andy Reed: Like my hon. Friend the Member for North-West Leicestershire (David Taylor), I have many constituents affected by the BUSM collapse. One of them alleges that, in other countries affected, the distribution on wind-up was protected by law. Can my hon. Friend confirm that a loophole in the 1995 Act allows wind-ups in this country to take place without protection? While the leaflet is important, it is clearly the 1995 legislation that is the fundamental problem.

Tony Wright: The easiest way to agree with my hon. Friend is to cite examples of companies that operated in different jurisdictions so that members of schemes were treated differently. One example is that of IFI Richardsons, which operated in the Irish Republic and in Northern Ireland. The company went insolvent and the pension scheme was wound up, but the workers in the Republic of Ireland had their full pension protected by Irish law. The workers in the same company in Northern Ireland lost their whole pensions. So it is the framework of protection that is fundamental, not whether a leaflet said this or that. The leaflet reflected what was believed about the framework of protection that had been established.

Henry Bellingham: The hon. Gentleman makes a compelling and well informed case. He will be aware that I represent several Albert Fisher pensioners, most of whom have lost 22 years' worth of occupational pension benefits. They tell me that they relied on those leaflets, and the parliamentary ombudsman found that they did so, but the Government argue that she did not prove that they relied on the leaflets. The Government are essentially claiming that my constituents are not telling the truth when they tell me that they relied on that information.

Tony Wright: My argument is that the information on the leaflet matters, but only in the context of knowing that a framework of protection has been put in place.

Gordon Prentice: As we are back on the subject of the accuracy of leaflets, paragraph 39 of the Committee's report cites the Secretary of State for Social Security saying in March 2000 that
	The public rely on government information. They are entitled to be reassured that leaflets are accurate and comprehensive.
	My hon. Friend will agree with that.

Tony Wright: Indeed. It is a basic principle of good public administration that leaflets should be of that character and that is why we are entitled to give attention to them.

Sally Keeble: The point about the lack of protection is dealt with by the Pension Protection Fund. The issue for the ombudsman is maladministration. My contention is that many of my constituents who lost their pensions previously because of insolvency are not entitled to anything. If the Government were to pay compensation to one lot, they would be asked, How about all the others? It seems to me that the right way to deal with the issue is to provide the protection that has now been provided through the Pension Protection Fund.

Tony Wright: Indeed. I thought for a moment that my hon. Friend was confusing the Pension Protection Fund with the financial assistance scheme, but I realised at the end of her observation that she was not and that I was able to agree with her.

Robert Flello: I am grateful to my hon. Friend for giving way to me yet again. I apologise for pressing this point, but it is crucial. He is making an extremely coherent argument about where liability lies, which is the central matter in this debate. He is also making it clear that the fundamental problem arises from the legislation, but will he explain once and for all the position of trustees? Does he agree that, instead of relying on four brief sentences or paragraphs in a leaflet, trustees should have sought professional advice? Does he accept that, had they done so, constituents of mine and other people would not find themselves facing another bleak Christmas?

Tony Wright: There is a trustee responsibility, but the ombudsman explored the matter and I do not think that it can be argued that the problem can be laid entirely at the trustees' door. The Committee took evidence from trustees, some of whom were trade union members. It is clear that they could not have known about the risk that existed when a company was wound up, as everything they had been told officially pointed in the other direction.

Kelvin Hopkins: I want to reinforce that point. One of the people who came to see us was a trade unionist who was described as being a lifelong Labour man. He trusted what he had been told because a Labour Government was in charge, and for that reason told his trade union colleagues to continue to pay into their pension schemes.

Tony Wright: That was very telling and memorable evidence, as was other evidence that we gathered from people directly affected by what happened.
	The Government have responded by saying that they do not accept that there was maladministration and that they are not liable. They have made it clear that they would like to help, if possible, although they will not provide a compensation package because the problem is not their fault. It was in that spirit that the Government introduced the FAS and then, as time went by, the extension to it.
	The Government have written to hon. Members to make it clear that the existing scheme is working very wellthat it is doing its job and helping peoplebut it is worth explaining why it is nothing like a compensation package. I do not want to go into the costs that have been cited for either a full compensation scheme or the FAS, as they are much disputed. Instead, I shall list some reasons why the FAS is not the package that is required.
	I begin by stressing that financial assistance under the scheme is not paid to many people. More than 10,000 people past pension age have been affected by the problems that have been set out, but scarcely more than 400 have been paid anything under the FAS. Most of those affected are not sure when, or if, they will get help; meanwhile, they continue to suffer the consequences of what went wrong.
	In addition, the Government have overstated or exaggerated the amount that people will get under the scheme. They will not get 80 per cent. of the pension that they originally expected: instead, they will get only 80 per cent. of what is called the core pension, which is much lower. Among other reasons, that is because the FAS excludes inflation linking, has no tax-free lump sum and does not start until wind-up is finished.
	Further, the whole FAS payment is taxed, whereas the scheme pension would have a tax-free lump sum. The member not only receives far less pension but pays more in tax.
	Members who expected to retire at scheme pension age have to wait until age 65 and the conclusion of wind-up. There is no inflation linking. The value of the payments from the financial assistance scheme will decline over time. Within 10 years, the value will be cut by more than 20 per cent. in real terms. The 12,000 pension cap is too low and is not inflation-linked. The real value of the cap will wither and take away much more of people's pension than currently appears from the headline figures.

Sandra Osborne: I congratulate my hon. Friend on the work of his Committee, which has made a welcome contribution to this debate. Notwithstanding the ombudsman's report, does he agree that by introducing the Pension Protection Fund the Government have acknowledged that protection was not adequate? Should not the financial assistance scheme provide at least similar benefits to those provided by the Pension Protection Fund?

Tony Wright: Absolutely. The financial assistance scheme is not intended to be as generous as the Pension Protection Fund. One of the problems is having a separate scheme, with those deficiencies. I will say a little more about that later.
	To continue with the deficiencies, spouse benefits are much lower than scheme benefits. Members of schemes winding up with solvent employers are excluded altogether. Those over 15 years from pension age are excluded. People in their 50s, who have contributed for more than 25 years, still have no means of redressing the loss and will get no help. Finally, the FAS does not provide any explicit recognition for the losses of the so-called guaranteed minimum pensionthe second state pension that was lost. That turned out to be neither guaranteed, nor minimum. The complexities of the so-called deemed buy-back scheme are proving impossible to negotiate and access.

Adrian Bailey: Earlier, my hon. Friend said that there was a moderate response from the ombudsman about the financial implications. Reference was made to not writing a blank cheque. However, the report also says that
	the Government should consider whether it should make arrangements for the restoration of the core pension and non-core benefits.
	It seems that there is confusion about what the ombudsman recommended and the Select Committee recommended. What is being denied is the accurate figure that the Government say is the implication of what is being recommended. My hon. Friend is not bringing that point out adequately.

Tony Wright: As was pointed out earlier, what the ombudsman really said was, Look, it's not my job to tell you what kind of redress package to put in. That is not what I am charged with doing. I am charged with telling you that there has been maladministration, and there has to be effective redress package. Then she said, as someone pointed out, Put your best people on to it. Send them away to put together an effective package, combining public funding and other sources of funding.
	That takes me quickly and neatly to my next point. At the moment, the Government are saying that they are not liable, but what if their proposition was that they accepted that there had been some maladministration and that they therefore had some liability? Let us say that they accepted that they must put together a more effective package than they have so far. What might such a package involve? It might involve taking the contracted-out state pension back into the national insurance scheme for free, possibly issuing an interest-free loan to trustees to cover the costs. Something like that happened with Maxwell. It might involve setting up a trust fund to collect money and use unclaimed assets for a rescue scheme. We could try to encourage actuaries, venture capitalists, employers and the pensions industry to contribute, as well as investing taxpayers' money.
	If the guaranteed minimum pensions are taken care of, compensation for the rest of members' pensions could be paid at Pension Protection Fund levels, as hon. Members have suggested. Alternatively, we could stick with a level of 80 per cent. of the FAS, but make payments tax free and linked to inflation. We could set up a mechanism for members who have suffered severely or who could prove that they read and relied on Government information to claim direct compensation from the Department for Work and Pensions.

Henry Bellingham: Will the hon. Gentleman give way?

Tony Wright: In a moment.
	Members who could have retired already should receive their pensions. It is obvious that if they had known about the priority order, they would have retired and secured their pension rather than stay at work and lose it. Tax-free lump sums should be paid, which would make a huge difference to many victims. Finally, spouse benefits could be improved beyond what is currently suggested. That package of effective measures could be adopted by a Government who were not committed to full compensation or full liability, but had come to think that they had some liability after maladministration and should be able to do much better.

Frank Field: For two years I tried to promote a private Member's Bill that dealt with that very issue. I did not think that we should always assume that taxpayers should foot every bill, so I suggested that we use the unclaimed assets of banks and building societies. The response from the Treasury Bench was, We cannot do that; they are not our assets. What is my hon. Friend's response to the fact that the Government are now going to use those assets to fund charitable activities in another special scheme? Surely the first priority of any moneys drawn down from those sources should be to people who have already lost, in effect, a large part of their life savings.

Tony Wright: I thank my right hon. Friend for that. When things that are said to be impossible suddenly become possible, I get very interested. It is right to think about which people should have first claim on such moneys and I believe that the people we are talking about today should have that first claim.
	I conclude by emphasising again what I view as the fundamental point. Whatever we say about this whole story, when we have traced all the events, read all the reports and expressed our sympathies, the fact remains that only the Government can organise a remedy. It is not a blank cheque argument. Whatever else we say, the truth is that only the Government can organise a remedy and only the Government can put together the package that we need. That is the argument: it is what the ombudsman told the Government and what the Select Committee told the Government. As I said earlier, both parties who have been in government and who have had a role in this should accept that they have an obligation to take the necessary action together.
	I end by taking us back to where I started, which is what the ombudsman herself told us about the constitutional significance of the issue. After the ombudsman read the Government response to her findings and recommendations, she told us that she saw a
	worrying trendthat the Department for Work and Pensions, the body whose actions were under investigation, considers that it is appropriate for it to decide whether to accept the findings of the Ombudsman, which Parliament has decided should on its behalf investigate and adjudge the administrative actions of government bodies...It is one thing for the Department for Work and Pensions or another government body to reject recommendations that I may make, after proper consideration of the public interest, and other calls on the public purse, and any other relevant matters. That is a decision that it is entitled to take, was one envisaged by Parliament when it decided that I would not have powers to make binding recommendations, and would be one for which the relevant Department would have to account to Parliament...However, it is entirely inappropriate, within a system of scrutiny of the way in which public bodies deal with citizens, for those whose actions are subject to such scrutiny to seek to over-ride the judgment of the independent arbiter established by Parliament to act on its behalfand for the Department for Work and Pensions' response to be merely to say that it does not accept that judgment.
	She concluded:
	This goes to the heart of the Ombudsman systemand of parliamentary scrutiny of the executiveand is a matter on which the Committee may wish to reflect.
	The Committee has reflected and has reported to the House. I hope that the House will reflect on the importance of the issue and that the Government will reflect further and respond appropriately. We responded to Maxwell's fraud. We responded to the pensions mis-selling scandal. We now have an obligation to respond to a failure of regulatory protection that has deprived tens of thousands of people of the pensions to which they were properly entitled.

George Young: I congratulate the hon. Member for Cannock Chase (Dr. Wright) both on a compelling speech in support of his Select Committee's report and on chairing what must have been a difficult report to produce, as it has some uncomfortable recommendations for the Government. I also congratulate the Committee on not simply rubber-stamping the findings of the ombudsman, but going round the course again and satisfying itself about the integrity of her arguments.
	Many Members want to speak in the debate, so I shall intervene only briefly. I do so for three reasons. First, like other Members, I have constituents who have been hit by the failure of their occupational scheme. Secondly, I believe the matter raises constitutional issues, which were touched on by the hon. Member for Cannock Chase at the end of his speech. Thirdlyperhaps uniquely, in relation to this debatewhen I was Secretary of State for Transport, my Department had a similar run-in with the ombudsman, which was satisfactorily concluded and might offer a model for a way out of the impasse in which we find ourselves.
	Like everyone else, I have constituents who have lost money in occupational schemes, and who are hoping for justice from the ombudsman's findings. Former employees of Croydex, a manufacturer of bathroom accessories in Andover, are now members of the Lionheart pension scheme. In 2000, the scheme was funded 98 per cent. on a minimum funding requirement basis, but by the end of 2001 the amount was only 87 per cent. and the company stopped making contributions. Following some complex legal arguments, the trustees had to accept a final settlement that left the scheme with a deficit of 8 million. If they had not agreed, they would have been even worse-off, as the company, which had negative net assets, would have gone into receivership. None of the approximately 600 deferred members of the Lionheart scheme will receive any assistance from the financial assistance scheme, because Croydex continues to trade. None of them will receive any assistance from the Pension Protection Fund because the scheme entered wind-up before April 2005. Most will receive only 10 to 20 per cent. of their pension. One employee who had worked for the company since 1958 found out two years before his retirement that he would lose 90 per cent. of his pension. He will receive no assistance whatsoever.
	My constituent, Mr. Hawkes, has campaigned tirelessly on behalf of these constituents and, along with others, he is understandably bitter about the recent letter that I and others received from the Secretary of State that made it clear that he may seek the costs of judicial review from the pensioners. Mr. Hawkes's confidence in the democratic process, and that of others who have read the Select Committee's report, will depend on how the issue is resolved.

Henry Bellingham: My right hon. Friend has highlighted two important problems with the FAS: first, solvent employer schemes are excluded; and, secondly, anyone more than 15 years from pension age is excluded, which affects quite a few of my constituents. The Government said that the extension to the FAS would be worth 1.9 billion. Is my right hon. Friend aware that the present cash value of the extension is only 540 million? The Government have to be clear about what the extension is worth.

George Young: The Select Committee began to query some of the estimates that the Government have given about costs.
	The second reason I wished to speak was to comment on the constitutional aspect of the situation. At a time at which neither MPs nor Parliament are held in high regard, this matter is a litmus test for the democratic process. We are all sent here to hold the Government to account. This is not the Opposition against the Government, but Parliament against the Executive. On the one hand, we have the unanimous conclusion of a Select Committee of the House that supports the findings of our parliamentary ombudsman, and on the other we have the Department for Work and Pensions, which is accountable, through its Secretary of State, to the House. The House, through its Select Committee, heard the Secretary of State's defence and unanimously rejected it. My constituents know that if Members of Parliament have the will, they can compel the Government to think again. If we do not, their worst fearsand those of others who have faith in Parliamentwill be fulfilled.
	I have a third and final reason for speaking in the debate. As Secretary of State for Transport in the previous Administration, my Department was involved in a similar stand-off with the ombudsman and the Select Committee. I say this in defence of the Secretary of State: he is pulled two ways because although the ombudsman and the Select Committee may be pulling him one way, he might well have his accounting officer and his permanent secretary, and perhaps the Treasury and the National Audit Office, pulling him the other way, reminding him that he is accountable for public funds.
	A letter dated 5 December was perhaps sent out in anticipation of the debate. It enclosed some Q and Aquestions and answersbut there was no A to the most frequently asked Q: why have the Government rejected the Select Committee's report? I found the letter rather dismissive of the Select Committee. Its unanimous recommendation is dismissed with the comment:
	While recognising some members disagree with that view.
	The case in which I was involved, which is referred to in the report, involved compensation for blight caused by the Channel tunnel rail link. I believe that it offers a way out of the current impasse. In that case, a satisfactory resolution was achievedit is referred to on page 36 of the report. Initially, the Department rejected the recommendations of the ombudsman and the Select Committee on compensation for blight. At this stage in the proceedings, however, the Government thought again.
	The letter that I wrote to the Select Committee on 1 November 1995 identifies the route that should be used on this occasion. I wrote:
	Despite the doubts recorded earlier, the Government is prepared to consider afresh whether a scheme might be formulated to implement the Committee's recommendation that redress should be granted.
	I went on to write:
	The Government would of course consult the Committee as proposals are being developed. I should add that in agreeing to look again at a compensation scheme, the Government does so out of respect for the PCA Select Committee and the office of the Parliamentary Commissioner, and without admission of fault or liability.
	I then added two somewhat pompous sentences:
	While being prepared to look at the possibility of a scheme, I hope you will also understand my making it clear at this early stage that we will need to consider seriously the possible costs of a scheme, which cannot yet be established. As Chairman of the Select Committee whose remit is good administration, you will understand that I would not be discharging my responsibility to the taxpayer by offering an open-ended commitment on an uncosted basis.
	The Select Committee that made the recommendations that we are debating today is looking for a similar response from the Government. All that the Minister need do at the end of the debate is say my exact wordsthere is no copyright on them. If he does, he will begin to build a bridge between the Government and Parliament, instead of further widening the chasm, and setting the Government on a collision course with the House.
	Finally, I offer a quote that the Minister might find helpful in his negotiations with the Treasury. Who said that there was
	clear and unmistakable evidence in the ombudsman's report of five significant areas of maladministration by the Department...Many pensioners have...lost their life savings, and retired workers their redundancy payments...I must ask why we have had to rely on the ombudsman to confirm the mismanagement...and incompetence that was widely known about more than one year ago...Does the Secretary of State agree that the House will find it strange that he...continues to deny the Government's responsibility for mistakes and does not even apologise for his Department's role??[ Official Report, 19 December 1989; Vol. 164, c. 204.]
	Those are the words of the Chancellor of the Exchequer, spoken in 1989. When the Minister writes to the Treasury, asking whether he can reopen the matter of the Government's decision, he might like to pray in aid that quotation, to secure a response from the Treasury. When he makes his winding-up speech, I ask him to put to one side the line that his Department might have drafted for him, and instead to respond to the mood of the House, which is, as I see it, that the Government should think again.

Alan Simpson: In truth, it ought not to be me speaking in this debate, but my constituent Brian Wilson, who is one of the pensioners who had their pensions stolen. He has turned out to be an incredibly valuable source of knowledge to me. I suspect that virtually all hon. Members have someone like Brian Wilson on their patch. If they do not, they should count themselves lucky to have missed out on the problem, but they are also missing out on an education as to where we went wrong.
	It is puzzling to understand why we should still need to hold such debates, because if we had followed a principle of three strikes and you're out, the Government would already be out. The comprehensive and damning report from the parliamentary ombudsman sets out why the Government are responsiblenot for the collapse of schemes, but for failing to set a rules framework for the schemes that made secure what the Government promised was secure. A report from the Public Administration Committee pretty much endorsed that conclusion, and it endorsed the call for the Government to intervene to set the matter fully, not partly, right.
	On the deliberations held in the High Court, only this week, in the case brought by the pensioners, the Government received an almighty rollicking from the High Court judge for failing to produce an outline of their defence until what was almost literally the last minute. They finally did so on Monday night. The words of rebuke uttered by the High Court judge on Tuesday morning, and the grovelling presentation made by Government legal representatives, demonstrated how poor a position the Government are in. When successive independent verdicts ultimately trace the line of responsibility back to the Government, the Government cannot say, We just don't care about those independent judgments; we won't accept responsibility for redressing the balance, whatever form that balance takes.
	It is with sadness that I approach our debate, because ultimately the courts will require the Government to accept the responsibilities set out by the ombudsman. As a result, those pensioners will be failed not just by the Government but by Parliament, which will be failing in its duty of scrutiny if it does not tell the Government of the day that they must accept responsibility, and if it does not introduce measures to provide full redress.
	I am pleased that it has been established that the matter does not rest solely on the Government's shoulders. In fact, it stems from the provisions put in place after the Pensions Act 1995, and the guarantees made by the Conservative Government that were endorsed when Labour came to power in 1997. It cannot be argued, however, that the Government fail to understand the nature of weaknesses and deficiencies that were built into the scheme that they put in place. After Maxwell, the actuaries advising the Government expressed doubts on several occasions about the weaknesses of the pension guarantee. The executive summary of the review of the minimum funding requirement published in May 2000 stated:
	there is a large and worrying gap between the level of security which the MFR test actually delivers and the public's perception of what it will deliver.
	The report went on to say:
	We recommend that, in addition to the MFR test, there should be a security measure which is clearly disclosed to members...Members would be informed that the MFR test differs from a true security test and does not give 100 per cent. security, as they currently believe.
	Much of the confusion that has emerged in debates is rooted in that belief.
	People who argue that the Government are responsible have never claimed that they were responsible for the failures of the schemes. However, the Government failed to put in place an adequate rules base for the functioning of the schemes; they failed to disclose to members the rules that would give preference to existing pensioners, rather than non-pensioner contributors; and they failed to disclose that the guarantee was not 100 per cent., or that members would probably reclaim only 50 per cent. of their funds.
	There is no point quibbling about people's distrust of the Government, and people's wish to check information elsewhere, because in the post-Maxwell climate, Government assurances had enormous importance. We failed the Ronseal testthe notion that the product does what it says on the tinbecause we told people that their pension was secure when we knew, because the actuaries told us so, that that was not the case.

Adrian Bailey: I hope that I am not misrepresenting my hon. Friend's argument, which is that the Government should pay compensation because they failed to implement an adequate regulatory framework to maintain the solvency of pension schemes. If one accepts that argument, there is a problem with the situation before 1995, when the regulatory framework was even weaker and a number of pension schemes went bust. Would the Government not have to consider compensating those people, if they were to accept that basis for paying compensation?

Alan Simpson: I do not accept that, because the Government said, Your pensions are secure, in the Pensions Act 1995. That may not have been true before 1995, and that legislation did not address the injustices of previous arrangements. From that point in time, the Governmentand, through the Government, Parliamentwere giving assurances to pension contributors that the Government knew to be untrue, because their own actuaries were telling them that they were. The actuaries have told us that successive Governments had a choice: they either needed to change the basis for the minimum funding requirement and make it do what it said on the tin, or they needed to tell contributors about the situation and give them the choice of making other provision. Successive Governments must take responsibility for the non-disclosure of those realities to contributors to pension schemes.

Robert Flello: Will my hon. Friend clarify a couple of points? First, back in the mid-1990s, when legislation was introduced post-Maxwell, it was said that pensions would be safe from somebody doing something underhand to steal them, not that pensions would be safe if the underlying investments or the company supporting the pension scheme did not do very well. The second point

Mr. Deputy Speaker: Order. In the circumstanceswe are very short of timeone will do.

Alan Simpson: We cannot rewrite history in retrospect in order to make it convenient for the present, when it was never true for the past. I have yet to find anyone involved in setting up those schemes who believed that all they were getting was a 50 per cent. chance of getting their money back. If Governments had said that to people, the contributors would have asked for the right either to get into another scheme or to bet their money on the horses at such odds themselves. That was not the guarantee that people believed they were getting as part of the post-Maxwell protection.
	I shall briefly move on to the question whether that means that the Government must pay compensation. As various hon. Members have said, the Government could use a number of mechanisms to try to make good the entirety of the provision, so they do not have to step in and take full responsibility. In order to understand why pensioners whose pensions have been stolen are so aggrieved about the nature of the current debate, we need to be clear that the financial assistance scheme does not remotely cover that provision, and that the numbers do not stack up against the losses.
	Although the Government claim that a total of 2 billion is being put forward to help 40,000 people, in truth the figures are somewhat different. A little more than 540 million has been committed over 50 years, which is about 12 million a year. The briefing issued by the Department for Work and Pensions before this debate points out that 1.5 million has been paid out since 2005 to about 450 people. That is a long way short of being a measure that deals with the stolen pensions of 120,000 or 125,000 people.

Nigel Waterson: Is the hon. Gentleman aware that delivering that fairly meagre sum of 1.5 million has already incurred costs of more than 7 million, for setting up a completely separate organisation in York to administer the FAS?

Alan Simpson: I am not aware of that figure, but I am aware of the bureaucracy and the tediously, grindingly slow process of getting money out of the system at all. Having constructed a bureaucracy of that sort, it is helpful to follow the first law of holes: When you're in one, stop digging. This mechanism is not remotely relevant to the scale of the problem that we have to address.
	I want to outline the positive choices that I hope that Parliament will explore in providing a full package of redress. We must do this not only because we have a moral responsibility to those who have had their pensions stolen but because we have a selfish interest, in that we must restore the credibility of pensions provision if we are to have any chance of getting a future generation of pension schemes to be endorsed by the public, in the face of such cynicism.

Andy Reed: Mr. Butler, a constituent of mine who has lost an 18,000-a-year pension, will not be a beneficiary of the FAS because he is too young. He is not the only one affected, because his friends, family and others now have no confidence whatever in current pension provision or in saving for the future, notwithstanding the Pensions Bill. There are generations who now lack confidence in us.

Alan Simpson: Absolutely. It is vital that the House understands the degree of cynicism that our response to the collapse of these funds has generated. I have had countless discussions in which whole families have taken part and someone has said, I'll tell you what advice I'm giving to my son or my daughter: when the Government say to you, 'Put your money into a pension scheme', I'll say to you, 'Blow it! Open the window and throw it out there and go and have a good time. At least you'll enjoy it rather than allowing it to be stolen behind Government guarantees.' If we fail to understand that cynicism, we are deeply damaging our prospects of bringing in new arrangements for stronger pension provisions that equate to the longer lives that we hope and expect to live in retirement. People will not play in a game that steals their life savings. These are acts of theft from people who have done what we asked. They have not been profligate; they have not blown the money: they have put it into schemes to make proper provision for their retirement. Those are the people whose cynicism we are having to deal with.

Robert Goodwill: I heard exactly those words from someone in my constituency who was a victim of the failed Henlys pension scheme. Some people not only paid for many years into that scheme but transferred large lumps of other schemes into it, in some cases only months before it failed. They are advising their relatives and friends not to invest in the future but to spend the money on bricks and mortar, or even on holidays.

Alan Simpson: The hon. Gentleman is absolutely right.
	Let me dash quickly through what I think we should be doing. What is required is a sum of, say, 150 million a year that needs to be put in place now and remain there for the foreseeable future. How could we do that? First, we could take a scoop out of the unallocated budgets for the Department for Work and Pensions for the next six years; it would not even be noticed. That would provide ample time to establish a trust fund, with whatever forms of partnerships in it, to make secure the ongoing provision of that 150 million.
	Secondly, we could pursue the initial proposal of my right hon. Friend the Member for Birkenhead (Mr. Field) and use a sliver of the money that we propose to take out of orphan assets from banks, building societies and insurance funds. That would easily cover such provision.
	We could consider our direct Government responsibilities and acknowledge that if we took a fraction of the 10 billion-a-year taxpayer subsidy that we currently allocate to higher rate tax relief, 150 million out of 10 billion would barely scratch the surface. It would not be much more of a pinch out of the 10 billion of taxpayer support that goes into the payment of contracting-out rebates. It is not as though we are short of existing taxpayer subsidies for doing the wrong things.
	If we can afford to tax-subsidise the pensions of the rich and those who contracted out rather than remained within, we should be able to find the 150 million to do the decent thing for pensioners whose only crime was to believe us when we told them that their pensions were secure.
	We are considering a worse problem than that caused by Maxwell, which affected 32,000 pensioners. The current problem affects 120,000 to 125,000 pensioners. Then, the Government acted quickly and properly. Today our response is partial, parsimonious and reluctant. My plea is to give Parliament the opportunity to decide for itself, on an affirmative resolution, whether we believe that we should exercise that responsibility to pensioners who acted on our assurances and were misled. If we fail to make that stand, not only will we be made to look foolish and shallow by the courts, but any future generation of pension schemes that we devise will simply fall off the table of credibility. We owe it to ourselves as much as to pensioners to redress the error.

David Laws: I congratulate the Chairman of the Select Committee, the hon. Member for Cannock Chase (Dr. Wright), on the Committee's report and his opening speech, which clearly set out the case for the prosecution.
	All contributors to the debate so far have considered how we hold the Executive to account in this place. It is reassuring to know that at least one of the Select Committees on which the House relies is doing its job effectively. The hon. Member for Cannock Chase, who is an independent-minded and effective Chairman, deserves some credit for that because the nature of Select Committees depends much on the individuals who chair them. It is a telling achievement to have produced such a critical report on a cross-party, unanimous basis.
	The Chairman of the Select Committee began his comments by paying tribute to the ombudsman and her hard work. I should like to do that on behalf of my party. I also pay tribute to those of all parties who have campaigned hard inside and outside Parliament on behalf of those affected by the loss of occupational pensions in the past few years. That applies not least to Ros Altmann, who has been a strong and powerful voice outside the House, and several Liberal Democrat Members, including my hon. Friends the Members for Chesterfield (Paul Holmes) and for Sutton and Cheam (Mr. Burstow), both of whom are present.
	The debate is important for three reasons. The first is the most obvious. As the hon. Member for Nottingham, South (Alan Simpson) reminded us, the problem affects 120,000 or 125,000 people, who have lost savings that, in many cases, they built up over many years. As the hon. Gentleman also said, the debate is important because the Government's handling of the matter will have a great impact on people's confidence in saving in future. On Tuesday, the Minister for Pensions Reform will launch a White Paper on personal accounts and he will try to persuade individuals who have not been saving for their retirement to do so in future. But he seems to be launching that policy in a hole-ridden boat, because confidence in pensions has been eroded by a number of developments in the past few years. It has undoubtedly been eroded by what has happened to these occupational pensions and, most significantly, by the way in which the Government appear to have walked away from their responsibilities to the 125,000 pensioners involved.
	A further reason for this brief debate today being so important was touched on by the hon. Member for Cannock Chase and by the right hon. Member for North-West Hampshire (Sir George Young); it is also central to the Select Committee's report. It is that the way in which the Government have handled this matter is directly relevant to the role and credibility of the ombudsman process. We heard today how there has been only a small number of occasionsperhaps four or five, since the ombudsman service was establishedon which Governments have ignored the conclusions of an ombudsman's report. In her evidence to the Select Committee the ombudsman expressed her serious concern about the way in which the Government had decided to treat her report, following a highly consultative process that led to the information that she gave to the Department for Work and Pensions.

Paul Burstow: When my constituents, Mr. Barrett and Mr. Sloane, who are members of the Acroelectric pension scheme, read the report of this debate, they will want to know one thing more than anything else. In 1995, they were promised safe pensions that were assured, and they want to know when that promise is going to be fulfilled. They will also want to know, after the three counts of maladministration cited by the ombudsman and a Select Committee report endorsed by all its members, when they will get the justice that they and many thousands of other pensioners across the country want. When will the Government implement a sensible scheme to resolve this injustice?

David Laws: I am grateful to my hon. Friend for raising those points. His constituents share the view of many people outside the House who have seen what the hon. Member for Nottingham, South called a three-strikes-and-you're-out process in relation to the Government's position on this issue. We find the Government still determined to resist the conclusions of a three-stage process. First, the ombudsman prepared her report in a way that fed back to the Department her developing conclusions, but that did not persuade the Government. Then we had the highly critical report from the ombudsman, and now we have a unanimous and extremely critical report from a cross-party Select Committee.
	We could continue to rehearse some of the detailed debates that the ombudsman and the Select Committee reflect on in their reports, but that would be difficult to do in the detail that some of the issues deserve in the 50 or so minutes that we have left. It is worth reflecting, however, on the strength of the conclusions that the ombudsman and the Select Committee have reached. The Chairman of the Select Committee reminded us of the terms in which the ombudsman put her conclusions. She concluded that the Government had provided information to the people who had lost their pensions which was inaccurate, incomplete, unclear and inconsistent. It is hard to imagine a more decisive, unambiguous and critical description of the information provided by the Government.
	The ombudsman's report went on to state:
	I have found that maladministration was a significant contributory factor in the creation of financial loss...Nothing in DWP's submissions persuades me otherwise.
	That was a conclusion from the first part of her process. She went on to reinforce the point about her own position when she said that
	Parliament has decided that it is my roleand not that of any party to a complaintto determine what constitutes maladministration.
	That is a fair point. Many of us would feel that the Government had a responsibility, after a process in which they had been given every opportunity to comment on and refute the allegations and concerns that the parliamentary ombudsman was looking into, to take far more seriously the conclusions that the ombudsman has reached, and which have been reinforced by the Select Committee.
	Despite being a cross-party body, the Select Committee has produced a report that echoes the criticisms of the ombudsman and, I believe, sides entirely with the ombudsman on every major point of dispute. It states:
	We agree with the Ombudsman that maladministration occurred. Government information about pensions was deficient and reasonable people would have been misled... the Government should have considered the Ombudsman's recommendations properly, rather than immediately assuming that they would place large burdens on the public purse.
	In language whose critical tone is similar to that used by the ombudsman, the Select Committee points out that it has conducted its own investigations and taken its own evidence. It also states:
	We believe that the Government is being, at best, nave and, at worst, misleading.
	That is a very strong conclusion for a cross-party Select Committee to reach, particularly given thatas many of us who have served on Select Committees knowin circumstances of this kind Committee members representing the governing party are often under pressure to water down conclusions that are especially critical of the Government. The terms of the report and its conclusions show that there must have been a very strong conviction among the Committee's members about the Government's handling of the matter.
	The Committee also reflected on the way in which the Government had decided to deal with the ombudsman's conclusions. In the ninth of its conclusions and recommendations, it says:
	We share the Ombudsman's concern that the Government has been far too ready to dismiss her findings of maladministration. Our investigations have shown that these findings were sound. It would be extremely damaging if Government became accustomed simply to reject findings of maladministration.
	As the hon. Member for Nottingham, South said, the Government have undergone a three-strikes process involving the initial consultations with the ombudsman, the ombudsman's report and a cross-party Select Committee report. In the light of that, I would expect the House and the Select Committee to be immensely disappointed by the Government's response to the Committee. On the issue of the ombudsman's position, they respond thus to the criticisms made of them:
	The ombudsman has, and will continue to have, the total and unqualified respect of the Government.
	It is one thing for the Government to respect the ombudsman; it is another thing for them to cast aside and ignore major recommendations affecting thousands of people when an ombudsman's report has trailed through all the evidence, and has been reinforced by a Select Committee of the House. If the Government are going to take future reports by the ombudsman seriously, they cannot afford to give the impression that advice in such reports will be accepted in small cases in which small issues and small amounts of money are at stake, while conclusions with a much greater impact on Government finances can simply be cast aside.
	In their response, the Government repeated the highly questionableif I may describe it in that wayallegation, or assertion, that the financial assistance scheme is a good enough replacement, and the changes to it debated in the other place yesterday an adequate back-up, for the individuals who have lost their pensions. The response says:
	The Government agrees there should be a significant package of support and believes that FAS, as extended, constitutes such a package.
	The hon. Member for Cannock Chase gave a detailed explanation of all the ways in which the financial assistance scheme is deficient in relation to the Pension Protection Fund, and all the ways in which the headline statistics in the scheme relating to the proportion of pensions that people can expect to be returned to them are let down by the proportion of the total pension package that is returned. In the Committee's report, the hon. Gentleman has also described all the ways in which the FAS is deficient. We debated the issue yesterday with regard to new regulations to improve the FAS. The improvements are welcomed by Members on both sides of the House, but they are still a long way short of adequate compensation.
	The Minister acknowledged that the Prime Minister was questioned on that specific issue yesterday. In response to a question from one of his hon. Friends, it seemed that the Prime Minister left open the possibility of further changes and improvements to the scheme. He said:
	I agree that it is important to keep the terms of the scheme under review.[ Official Report, 6 December 2006; Vol. 454, c. 301.]
	I hope that that was not simply the sort of comment that Prime Ministers make under pressure, as a way of fobbing of their own Back Benchers who are concerned about injustices of this type. When the Minister responded to my question about the Prime Minister's commitment, he did so in rather lukewarm and ambiguous terms. He said that the Government keep all their policies under review and will continue to do so. That was not particularly cheery and it rather made me think that the Prime Minister had been giving a brush-off rather than a hope of real improvement.
	Perhaps we should not be so gloomy, however. The Minister looked unimpressed when the hon. Member for Nottingham, South described some of the ways in which the financial assistance scheme could be improved, and some of the ways in which a fairer compensation package should be delivered. I remind him that his predecessors were similarly unimpressed when the arguments for such a scheme were first made. At that stage, the Government did not want to give way on the issue. Eventually, they found the money to introduce a scheme, and then maintained that it was good enough. Yesterday, we debated the new scheme and the improvements to be made. Ministers always say that improvements to such schemes are unaffordable, and go on saying that until they are forced to make changes and improvements. The right hon. Member for North-West Hampshire made a helpful suggestion to the Minister, and demonstrated how Governments can make rather elegant U-turns if they want to do so. I seem to recall that the Government of which he was a member had a habit of making quite a few U-turns, not all of which were elegant, but he showed how Governments, if they wish to do so, can change their opinion.
	Given the Government's formal response, I do not have high hopes that today's ministerial summing-up will take on board the criticisms made by the Select Committee and the ombudsman. I hope, however, that the strength of opinion expressed in the House during the debate, and the strength of opinion in a cross-party report, will cause the Government to keep the issue under review. I hope that the Prime Minister's comments yesterday will allow further improvements to be made to provide a fair package of compensation to people who have lost their pensions under such circumstances.

Madam Deputy Speaker: Order. Approximately 17 minutes are left for Back-Bench contributions to the debate. Under the circumstances, may I ask hon. Members to make their contributions brief?

Julie Morgan: As a member of the Public Administration Committee, I am very pleased to speak in this debate. This is an important debate in two respects: first, in relation to the fate of the estimated 125,000 people affected; and secondly, in relation to the status of the ombudsman's office and the Government's response to her recommendations.
	The Public Administration Committee, ably led by my hon. Friend the Member for Cannock Chase (Dr. Wright), interviewed many people who had suffered the loss of most of their pensions. They gave moving testimonies. As a Cardiff MP, my constituency was very much affected by the closure of Allied Steel and Wire, which, in 2002, went into receivership, resulting in 838 employees losing their jobs. In the summer, I met a large group of Allied Steel and Wire workers in my constituency, who told me how upset they were when they first learned that the plant would close, although at least they thought that their pensions were safe. Ten days later, however, they learned that they had lost most of their pensions. When the ombudsman's report came out, they believed that they were saved. They thought that the Government always took notice of the ombudsman and that there would be a solution. The issue of the ASW workers' pensions is still a running sore, and they continue to campaign on it to this day. They strongly believed that the ombudsman was an independent voice that the Government would heed, but that has not happened in this case.
	On Monday, the ombudsman made a speech at a seminar at the constitution unit. She mentioned three prominent cases where there was disagreement but where the Government changed their mind and, to some extent at least, remedied the injustice. As a result of our debate, I hope that the Government will think again, and that they will look back to see how the Government did change their mind in those three cases and moved, at least in part, towards what the ombudsman recommended. There are now two outstanding cases, one of which is the occupational pensions issue.
	I do not suggest that the Government have done nothing. The Pension Protection Fund has been mentioned and it will in future protect pensioners who fall into such circumstances. The Government have also set up a financial assistance scheme, but we have heard about that today and we know that it is woefully inadequate. I pay tribute to the hard work that has been done, led by ASW pensioners and by the unions Amicus and Community, to keep the issue on the agenda by taking it to the European courts and trying to get recompense for their members. The changes that were made to the financial assistance schemewhich must have been brought in partly as a result of the ombudsman's reportimproved things by extending the scheme to those within 15 years of retirement. That was a step forward. But there are still huge inadequacies.
	I have constituents who miss out on the 15-year extension even though they paid into the pension fund for more than 30 years. One of my constituents, from Whitchurch in Cardiff, misses the 15-year extension by three months. It is impossible to underestimate the stress and anxiety that is caused to entire families.
	Another constituent from Heath worked in the steel industry in Cardiff from the age of 15. He worked with ASW until the closure in 2002, contributing to the works pension scheme. He had previously contributed to the state earnings-related pension scheme, and he transferred to the final salary works pension scheme believingunder the guidance of the Government, as he saw itthat that was guaranteed. When he heard about the increased funding under the financial assistance scheme he wrote to me:
	To my utter dismay, I find that no assistance is available to me, since I do not fall into the category of being within 15 years of retirement, being 2 months short of the qualifying period. This is totally unjust, as up to the closure of ASW, I was employed in a very harsh environment, paying taxes fully, while doing my utmost to secure my future for retirement via the works pension scheme, as recommended by the Government...After 34 years contributing, I face a bleak retirement.
	The ASW pensioners whom I have met in Cardiff all believed that they were following the Government's guidance, and they also believed that the Government would act on the ombudsman's recommendations. This is a matter of trust, and the Government should address it. It will be good if the Minister confirms today that they will at least look at what can be done to address the important issues that have been raised.
	Attention has been drawn to the ombudsman's recommendations. She has not asked for the Government to fork out the entire amount. She was not asking for a blank cheque. As she said:
	I did not say, Write a blank cheque, but to organise a remedy.
	The Government's response to the ombudsman has, however, been very disappointing. It states that
	the Government does not believe that the information issued by the Government can be regarded as having caused the losses.
	The Government cannot of course be blamed for the failure of the schemes. The failure was that member schemes were not protected by the Government in the way that the members believed they were. That is what they said in evidence to the Committee. They believed that they were protected. However, although we are not blaming the Government for the fact that these schemes have collapsed, it is in this context that they should look at the matter.
	On the question of the leaflets, the Government reject the notion of maladministration because they believe that it was clear that the information on the leaflets should not have been taken in isolation. However, the ombudsman made it clear to us in Committee that the information did influence many of the people affected. She described individuals coming to see her and showing her the parts of the leaflets to which they had paid attention. There is no doubt in my mind that the ASW pensioners in Cardiff strongly believed that they had been following Government advice, and that, as far as they were able, they had looked into protecting themselves responsibly for their retirement.
	Most of the past disagreements between the Government and the ombudsman have reached a satisfactory conclusion, and the ombudsman herself says that she sees no need for a power to make her recommendations legally binding. Surely Parliament can work out a solution to this situation. The evidence is strong and compelling. The Government should listen to what is being said in the House today and find some way of sorting out a grievous situation and running sore that will otherwise continue.

Michael Penning: I think and hope that the Government have listened to the compelling arguments made by all those who have spoken this afternoon in this very important debate, which has sadly been cut short, not least by an obviously orchestrated campaign by the Government Whips Office to intervene in order, it would seem, to put the ombudsman on trial. However, I shall not waste time discussing that; the members of the public who have been listening to this debate, and the 700 members of the former Dexion scheme, will have heard that for themselves.
	I pay tribute to the Chairman of the Select Committee and to the ombudsman for a brave report and for sticking to their guns. There is an old-fashioned phrase that is not heard much these days: natural justice. Their report is an attempt to secure natural justice for many of our constituents and their families and loved ones, who have had their pensions stolen from them.
	I became a Member of this House only some 18 months ago, but approximately five years ago the campaign team for the former Dexion workers approached me and showed me the documentation that they had been given over the many years that they had worked for Dexion. They left that documentation with me and it did not take me long to realise that they had a very strong case, in the light not just of the recommendations and actions of this Government, but of those of my own Government in the period since 1995. The leaflets were flawed; that was my view before the election, and the reason why I have worked tirelessly to help them.
	The 120,000-plus people whose pensions were affected are not just numbers. We have heard about the fantastic work that Ros Altmann has done on behalf of the campaign group, and I pay tribute to Ros today. These are ordinary people who were going about their business; in my company's case, they had worked for the company for a very long time. They had done the right thing. They had paid into a Government-recommended, perfectly safe pension scheme, so that they would rely not on state benefit, charity or a handout from a scheme, but on a pension scheme that they had purchased on behalf of their families and loved ones.
	Marlene Cheshirea delightful ladyhad to tell her husband David on the day he died that the compensation had come through and that everything was okay, so that he would pass away thinking that everything was okay for her, and that she had been left with the money. The Minister met the widows group that I brought to him. The stories that they tell are massively distressing. Marlene is one of 400-odd members of such schemes who receive some money from the financial assistance scheme. The Minister knows how much she gets20.00 a week. If the decimal point were shifted, that would be somewhere near what she should have got.
	I am not saying that the taxpayer should pay everything, and nor are the former Dexion workers campaign group, the ombudsman or the Select Committee. What we are saying is that we need to come up with a plan. The hon. Member for Nottingham, South (Alan Simpson) has come close with the ideas that he put forward today, some of which I was going to offer myself. I shall raise other issues. For instance, the schemes are still being forced to purchase annuities. Why? How much is left in the schemes? Perhaps the Minister can tell us when he winds up the debate, because the figure is missing and there is a lot of money still being administered by the trustees.
	Many of the unclaimed assets that the Chancellor thinks that he can use are from pension schemes in insurance companies. What better use could there be for that money than to compensate those wonderful people?

Henry Bellingham: My hon. Friend makes a compelling case. He will be aware that I represent several Albert Fisher pensioners, many of whom have lost more than 20 years of occupational pension benefits. They were forced to contract out of SERPS and put their NI contributions into the Albert Fisher scheme, but they will get only about 50 per cent. of their expected pensions. What my hon. Friend is saying about the unused assts and other approaches that the Government must consider is absolutely correct.

Michael Penning: I am grateful for my hon. Friend's support. So many of those people joined their companies on apprenticeships when they were 15, 16 or 17. I was lucky in that I joined an apprenticeship in the armed forces at 16, so my pension is safe. Those people worked for one company, loyally, for their working life and, if they are not within 15 years of retirement, they have lost everything. The scheme will not give them a farthing. They have to go back out to work and build up a whole new pension all over again. What faith can they, their families and friends or anybody who reads the report of this debate today have in pension schemes? They will be frightened because they will not get many of the benefits of the Pension Protection Fund that the Government have introduced. It is not index-linked and they cannot take any of the benefits in a tax-free lump sum, which they would have been able to do in their own schemes. The widows are suffering enormously. There are so many issues that make one scheme right for one group of people but wrong for another. Where is the natural justice in that?
	I would have loved to speak for longer, but the debate has been cut short, as I have said. I hope that we can all come together as a Parliament to accept the ombudsman's report. Parliament appointed her to assess cases and she can find for the Government or against them. In this case, she happens to have found against the Government and that there was maladministration. I hope that we can accept the Committee's report, sit down, bang some heads together and set up a fund that will give the people the living that they deserve and the pensions that they should have had.

Andrew Miller: I can tell the hon. Member for Hemel Hempstead (Mike Penning) why he should not just simply accept the ombudsman's report. She should have started back in 1986 when a 5 per cent. cap on surpluses was established by Nigel Lawson, who said in his Budget statement that he needed
	to deal with the growing problem of the rules governing pension fund surpluses.[ Official Report, 18 March 1986; Vol. 94, c. 176.]
	He thought that there was too much money in pension funds, but in hindsight that was a lunatic's decision. Soon after that, through the combination of the impact of his changes and the raids that companies conducted on their pension funds, we saw the beginning of the end for many of our big pension funds. Had the ombudsman started at that point, I am certain that she would have got further down the route. The decision was of course made at a time of 10 per cent. inflation.
	There are still 1,000 billion-worth of assets in our pension funds and we should not pretend that all the funds are on their knees; there are still some extremely good ones. The pension fund failure that resulted in my being the first Member of Parliament to say that the Government should put their hand in their pocket was that of H. H. Robertson, which collapsed at the fag-end of the previous Conservative Government. I have already thanked John Taylor, the Minister at the time, for the work that he did in getting the Serious Fraud Office involved in the matter. I am glad to tell my hon. Friend the Minister that members of that scheme are now receiving some payments through the financial assistance scheme.
	Some details remain to be sorted out to make sure that the transition works, but I shall take my hon. Friend through them at another time. However, if a pension scheme had collapsed when regulations under the 1995 Act came into force in April 1997, the actuary would have been required to value the scheme using the benchmark minimum funding valuation. The contributions due to the scheme would have been certified by the actuary as adequate to increase the funding level over the five years, bringing it up to the statutory minimum level.
	The House needs to ask serious questions about the competence of the actuarial professionals who certified the schemes year after year. They did not make sure that the standards of their professional associations were met. In addition, I remind my hon. Friend the Minister of an observation that I made to one of his predecessors in 1998. I said that, because of the losses incurred as a result of pension fund collapses, the state was paying out a huge amount of money in benefits and pension credits. If the Government were to conduct an analysis of the money involved, they could determine a better figure for what needs to go into the FAS, and that solution could meet the requirements set out in the report presented by my hon. Friend the Member for Cannock Chase (Dr. Wright). I therefore urge the Minister to keep probing away down that route.

Nigel Waterson: It is always a pleasure to follow the hon. Member for Ellesmere Port and Neston (Andrew Miller), and I am very pleased to contribute to a debate that is rather shorter than originally envisaged. I begin by joining others in paying tribute to the hon. Member for Cannock Chase (Dr. Wright) for the report that he has produced and the masterful way in which he opened the debate.
	Although it is invidious to mention individuals at the end of a debate such as this, I should like to pay particular tribute to my right hon. Friend the Member for North-West Hampshire (Sir George Young). He made an excellent contribution and may have showed the Government how they can get out of this mess. I also want to pay tribute to my hon. Friend the Member for Hemel Hempstead (Mike Penning), who has been a truly doughty campaigner for those of his constituents who have suffered so badly. After nine long years, this Government are finally tackling the pensions crisis. The Opposition have been working hard with Ministers and officials to try to achieve a consensus on pensions reform. We embarked on the task for three reasons. First, it is the right thing to do, given the breadth and depth of the pensions crisis. Some 2 million pensioners are still living in poverty, and a recent report showed that, unlike the rest of the population, pensioners have to live with a 9 per cent. rate of inflation. Council tax has soared, and half of all pensioners are subject to means-tested benefits. Recent figures from the Office for National Statistics show a further decline in private sector pension provision. Since 1997, 60,000 occupational pension schemes have closed, and 125,000 people have lost their pensions.
	When Labour took office in 1997, Britain had the strongest pension provision in Europe, but now it is among the weakest. The charge sheet laid at the Government's door in respect of pensions goes beyond mere inaction in the face of a growing crisis: it makes it clear that the Government have heaped additional costs and red tape on companies that have tried to keep their pension schemes going.
	Moreover, it is this Chancellorthe clunking fist himselfwho through his annual 5 billion tax raid on pensions has forced schemes into deficit or to close to new, or even existing, members.

Henry Bellingham: Does my hon. Friend not think it extraordinary that no one on the Government Benches mentioned the Chancellor's 1998 Budget changes, which have heaped these extra costs on pension funds? Is he aware that the total cost now is not 50 billion? The total cost, including all the opportunity costs, is nearer 100 billion.

Nigel Waterson: My hon. Friend is right. What is also extraordinary is how fiercely the Chancellor is resisting freedom of information applications to obtain the advice that he received at the time on his decision to scrap dividend tax credit.
	I mentioned that there were three reasons for building a consensus. The second is that any decisions made, or not made, now will have an effect 40 or 50 years on. Any number of Ministers and Governments will have come and gone by then. Thirdly, there is every possibility that it will fall to the Conservatives to implement many of the reforms. That serves to concentrate the mind in opposition. We want to ensure that whatever happens is workable and can deliver a sustained and meaningful benefit to future generations of people in retirement.
	I will say little in this debate about the state pension changes. The restoration of the earnings link and help for women pensioners, for example, were both in our last manifesto. Retirement must become more of a process, rather than an event. Yes, we should gradually extend the state pension age, but we must build in flexibility in retirement. A massively important part of the Turner-inspired reforms is the setting up of personal accounts. We support the general direction of travel on that, but we have a number of serious concernsas the Minister knows, because we share them fairly regularly. I do not have time to go into them in this debate. They include means-testing, levelling down, some of the cliff edges in the state pension changes and the whole issue of public sector pensions, where the total liabilities are now estimated at over 1 trillion.
	It is interesting that research to be published by the pensions industry tomorrow includes some quite serious figures on the effect that levelling down could have under the personal accounts regime. If personal accounts are to fill the yawning gap in savings for retirement in this country, they must command the confidence of British workers. That in itself is a good enough reason for trying to achieve consensus. If people pick up on the fact that the official Opposition and Government-in-waiting have concerns and might change everything in due course, it would be yet another excuse for putting off decisions about their own pensions.
	There is another factor that has caused untold damage to people's confidence in pensions: the regular publicity surrounding those who through no fault of their own have lost their pensions. We have heard a great deal about that tonight. On any viewI choose my words carefullythe Government's handling of the situation has been both shabby and inept. It has been an insult to the 125,000 people involved. However, the Government have also undermined the pivotal position of the ombudsman in our constitutional system.

David Burrowes: Does my hon. Friend agree, in thinking about the Government's response to the report by the Public Administration Committee, the role of the ombudsman and the relationship between Parliament and the Executive, with the reference to this matter as a litmus test? Does he agree with the comments made by my constituent, Thomas Ackland, who is one of the 1 million former Equitable Life victims? He says:
	There would seem to be little point in an independent investigative body, designed to uncover departmental failure and maladministration, if the Government then, bald-faced, refuses to act on the recommendations and, worse still, contests the Parliamentary Ombudsman's findings.

Nigel Waterson: My hon. Friend is absolutely right. I remember, as a fresh-faced law student in 1968, learning about the exciting new post of the parliamentary ombudsman and the massive significance that it would have. The Government have also undermined confidence in the whole pensions system at precisely the moment when restoring confidence is so important to underpin durable pensions reform.

Adrian Bailey: In the event of the Government being unable to get a package of further support from the private sector, is the hon. Gentleman making a commitment that his party would totally fund the recommendations of the ombudsman's report and the Select Committee report?

Nigel Waterson: I shall come in a moment to what should happen and what the Government should be doing, if the hon. Gentleman will bear with me.
	Various hon. Members have quoted from the ombudsman's report and I shall not pursue it further, particularly in view of the shortage of time. However, I would like to mention the ombudsman's views on the financial assistance scheme. She said:
	I am quite clear that the FAS will not constitute an adequate and appropriate remedy for the injustice claimed by those who have complained to me.
	I would also like to take the opportunity to pay tribute to Ros Altmann, who has been an extremely energetic campaigner for various pensioner groups and has quite rightly pursued all of us at different times to come up to the mark on this issue.
	Before responding to the question of what the Government should be doing, I would like to cite one passage from the Select Committee report. I could use many, but time does not allow. It states:
	We have made our own investigations. We believe the Government is being, at best, nave and, at worst, misleading... It would be extremely damaging if Government became accustomed simply to reject findings of maladministration.
	I agree with that.
	What are the Opposition's views about how the Government should properly address this matter? First, the Government should agree without equivocation or evasion that there has been maladministration. It is not their job to decide whether there has been maladministration, but the ombudsman's joband she has decided. Why should these desperate people have to resort to taking the Government to court to obtain justice?
	I shall now provide one quote to illustrate what the Government's approach should be:
	The giving of wrong information by a Department is inexcusable. There is a clear responsibility to ensure that the information that Departments provide is accurate and complete... As a matter of principle, we believe that when someone loses out because they were given the wrong information by a Department, they are entitled to redress.[ Official Report, 15 March 2000; Vol. 346, c. 307-8.]
	Those were the remarks of the then Secretary of State for Work and Pensions, the right hon. Member for Edinburgh, South-West (Mr. Darling).
	Secondly, the Government should apologise, as directed by the ombudsman. An apology costs nothing. If it helps, Conservative Members will accept a modest share of the blame arising from our stewardship in 1996-97, while being clear that the problem of the weakening of the minimum funding requirement on more than one occasion, the change in the priority order, the collapsing pension funds and the ombudsman's investigation and report all took place on this Government's watch.

Tony Wright: As the hon. Gentleman has heard, I have been critical of the Government and I agree with all who say that this is a matter between the House of Commons and the Executive, but I would like to hear from himlest he mislead anyonewhy the Conservative party has officially said that none of its Front Benchers can sign a cross-party early-day motion on the matter because it might just incur some spending of public money. It would be helpful if the hon. Gentleman could clarify exactly the Conservative party position.

Nigel Waterson: The answer is very clear: it was not a cross-party early-day motion. If the hon. Gentleman, for whom I have utmost respect, had troubled to talk to us before tabling his early-day motion, we might have been able to agree a slightly different wording with which we would have been content. It is unfortunate that the impression has somehow been gained by some of the pensioner groups outside the House that that did happen when it did not.

David Laws: Will the hon. Gentleman tell us which part of the early-day motion he disagrees with? We were not consulted either, but it is a broad early-day motion and I would not have thought that it would lead to any objections. Which part, then, does the hon. Gentleman object to?

Nigel Waterson: In my next life, I hope to be a Liberal Democrat, as it is so much easier and any early-day motion can be signed. If the hon. Gentleman will bear with me, I am coming on to the substance of his point.
	Thirdly, the Government should finally recognise that the recommendations to ensure an appropriate level of support for those who have lost out must be taken seriously. They should stop floating absurdly inflated figures such as the 15 billion figure tossed around by, among others, the Prime Minister. That sort of thing is insulting to our intelligence and, indeed, to the victims.
	The Government should do some serious and credible work on calculating the real likely cost of helping the victims. In their calculations, they should give credit for benefit payments saved, pool the assets of the failed funds and take full account of the possible benefits of deemed buy-backone of the best kept secrets in the DWP and the Treasury. They should examine whether purchasing bulk annuities is the best way forward. Perhaps they could also provide relevant information about how much money is left for that purpose in the relevant funds. They should scrap altogether the wasteful and unnecessary administrative machinery of the FAS and run the compensation scheme in parallel with the PPF, using the same skills base.
	It seems to us a matter of principle that those who deserve help, following the ombudsman's report, should expect that help to be at a reasonable level. Will the Government estimate the real cost of providing support at a level similar to that available under the PPF? In making those calculations, they should factor in the money already committed, as well as using unclaimed assetssomething on which we have campaigned for some time, as has the right hon. Member for Birkenhead (Mr. Field). The Chancellor now accepts that unclaimed assets can be used for certain purposes, and we agree. It is interesting that according to the unclaimed assets register unclaimed pensions alone amount to about 3 billion.
	Above all, the Government must recognise the immense damage that this episode has inflicted and continues to inflict on long-term pensions confidence and stability. If the system of personal accounts foreshadowed by Turner and picked up by the Government, and which we broadly support, is to succeed, confidence-building must happen. In short, we and the victims expect the Government to show leadership on the issue. That means examining the options realistically, providing the necessary information and promoting an informed and sensible debate. Then we will see whether the positive benefits of consensus can apply in this situation, too.
	In some ways it is unfortunate that we shall not be voting on the motion. I leave Membersincluding Labour colleagues, many of whom are sympathetic to the casewith the words of Dick Crossman, on the Second Reading of the Parliamentary Commissioner Bill:
	Wisely used, this can be a potent instrument for the protection of the good name of the Civil Service, for the restoration of Parliamentary authority and for the redress of individual grievances.[ Official Report, 18 October 1966; Vol. 734, c. 61.]

James Purnell: I will try to get through as much of the material covered in the speeches as I can. If I do not cover points made by Members I shall be happy to meet them to discuss matters with them and their constituents.
	I congratulate my hon. Friend the Member for Cannock Chase (Dr. Wright) and the Select Committee on their work. I hope to go through as many of the points they raised as I can.
	I want to make it clear that the Government respect the role played by the ombudsman, and we will continue to do so. The case we have been discussing is exceptional. The Committee asked us to explain whether it was a new policy or a new approach. The case is exceptional. We shall continue our approach, which is to respect the ombudsman. In fact, in 39 years, this is the first time that my Department has not responded positively to an ombudsman's findings.

David Laws: In the Government response to the Select Committee report, there is an indication that in future an official in the Treasury or Her Majesty's Revenue and Customs will be regarded as the ombudsman's champion. I think the House is meant to be reassured by that. Does the Minister think we will be? What will the role of that official be?

James Purnell: As I understand it, their role will be to work with the whole Government to make sure that we follow good principles of administration and that we respond to the ombudsman appropriately. She has been working with us on some good principles of administration. If the hon. Gentleman asked her, I think he would find that she was relatively happy with those proposals.
	It is worth making the point that although what happened was exceptional, it is not unprecedented. The ombudsman herself recognises that the Government may
	reject recommendations that I may make, after proper consideration of the public interest, and other calls on the public purse, and any other relevant matters.
	As the right hon. Member for North-West Hampshire (Sir George Young) said, we have two duties to Parliament: first, to take proper account of the ombudsman's findings and, secondly, properly to account for the use of public money. It is not our money, it is taxpayers' money. We have been trying to strike a balance between those two dutiesour respect for the ombudsman and the proper use of public money.

David Burrowes: The Minister quotes the ombudsman, but why did he not continue the quote, which shows that it is unprecedented for the Government to reject her findings? The ombudsman says:
	The Government appears to draw no distinction between a rejection of the Ombudsman's findings of maladministration and injustice and a rejection of the Ombudsman's recommendations for redress.
	It is both rejections that make the action unprecedented.

James Purnell: It is not unprecedented for a Government to reject findings of maladministration. The previous Conservative Government did precisely that. In that case, the then Secretary of State for Trade and Industry said:
	I want to make it clear that the Government do not accept the Parliamentary Commissioner's main findings.[ Official Report, 19 December 1989; Vol. 164, c. 203.]
	The question that we should be asking today is not whether people have sufferedwe realise that they have suffered, which is exactly why we put in place the financial assistance schemebut what is the proportionate response?

Richard Burden: My hon. Friend might recall that during Question Time on 16 October I suggested that this matter might well end up in the courts. Although it would be quite wrong to talk about the substance of the court case, the pensioners themselves feel that the Government are threatening them with costs if the case is pursued to judicial review. My hon. Friend said that the Government were waiting to hear from the pensioners' representatives, but it has now been established that it is the other way round. When will the representatives of the pensioners be hearing from the Government?

James Purnell: That has not been established. I saidthis continues to be the situationthat the representatives have not made the case that the matter fits into the normal precedent whereby the Government would waive costs. We have said not that we will enforce costs, but that we will consider them, as we always do, at the end of the case.
	We have tried to respond to the Public Administration Committee's report as constructively as possible. We are implementing several of its recommendations. For example, there will now be a two-year wind-up. We have also made it clear that survivors will be paid and that people can be paid from the age of 65. It is true that the support that we have put in place continues to be less than what it asked for.
	It is worth saying that the scheme has been extended to 40,000 people since the ombudsman first published her report. We took that report into account when we made the extension, and I think that the House has welcomed our action.

Kitty Ussher: I am grateful to my hon. Friend for giving way because I know that time is short. He will be aware that MB Aerospace in my constituency restructured and closed its pension scheme in 2003. I have written to the Minister about this matter, but will he confirm today that employees of the company in their 50s will be eligible for financial assistance? Will he urge the administrators to complete the wind-up, because while it is not completed great uncertainty is being caused?

James Purnell: I am happy to give my hon. Friend that confirmation. I think that there are some members in payment in that scheme.
	We want trustees, administrators and insurance companies to co-operate as fully as possible. There are now about 600 people in payment, and we are in a position to pay more than 800that is up from 39 in May. We want to pay more people, but the main obstacle is either schemes requesting initial payments, or problems regarding the completion of schemes' wind-ups. Although most schemes are being co-operative, we think that several could be making much more progress. We have written to some of those schemes. We have powers to deal with them if they fail to co-operate and, if necessary, we will not be afraid to use those powers.

Henry Bellingham: Will the Minister give way?

James Purnell: I would like to make some progress. I have very little time, so I am afraid that I will not give way.
	The main point that my hon. Friend the Member for Cannock Chase made was that the Government had set up the regulatory framework and were thus responsible. It is worth pointing out, however, that we think that most of the companies in the category did not meet the basic rules that were set out under the regulatory framework that was introduced by the Conservative Government. Most schemes did not meet the minimum funding requirement, and the leaflets made the case that protection was in place only if the MFR was met.
	It is not correct to say, as my hon. Friend did, that the disclosure regulations prevented people from saying that there were risks in their schemes and pointing out what they were. They were perfectly able to do so. At the time, the Government did not say that they should not talk about risks. His interpretation of what happened was not correct.

Mark Todd: As the Minister knows, I have some sympathy with aspects of the Government's argument, but I have doubts about the quality of the literature produced by his Department. Will he make a statement that applauds the quality of that literature, without qualification? As I have pointed out to him, I think that it was flawed and incomplete, and we deserve at least some public acknowledgement of that.

James Purnell: It was the right level of information to provide, given the context. We are talking about introductory, very general leaflets. Hon. Members who have read them will know that they dealt with very basic questions such as, What is a pension? If we had given the amount of detail that it is suggested, with hindsight, we should have done, they would have been not leaflets but handbooks, and they would not have served the purpose for which they were intended.

Robert Flello: I came to the Chamber this afternoon to hear the arguments, but I have not been convinced that most, if not all, liability rests with the trustees for not exploring, and conveying, how much risk there was. For the sake of Mr. and Mrs. Ward in my constituency and other people, I ask the Minister to look again at the financial assistance scheme, and consider whether any improvements can be made.

James Purnell: We will continue to keep the scheme under review, as is right, and if other sources were to make further contributions to it, that would be welcome. However, the key point is whether the assistance that has been given is proportionate. We need to ask ourselves what principle the ombudsman works to when making recommendations about recompense, and she actually gives the answer in her report:
	it is my usual practice to seek to put individuals back into the position they would have been in had that maladministration not occurred.
	The truth is that, if that were the situation, those individuals would have been put back into a situation in which funds were underfundedsignificantly, in most casesand in which their employers were about to become insolvent. There is very little that people could have done to rectify the situation in which they found themselves.

Michael Penning: Will the Minister give way?

James Purnell: I am afraid that I must wind up my speech.
	I would argue that the scheme that we put in place is far more generous than anything that would have been paid for we had done no more than consider the circumstances, because the vast majority of peoplevirtually everyone who was in the schemesjoined them before any of the leaflets were published. As we have made clear, we do not believe that there was maladministration, but even if people want to argue that there was, they must also address the fact that virtually everyone was in the scheme before the leaflets were published, and there was very little that they could have done to transfer out, because the value of their pension would have been reduced. There was little that they could have done to get the employer to put more money into the scheme, because the employer, as we know, was about to go to the wall, and it is extremely unlikely that any other company would have wanted to become involved and take over the liabilities.
	We have great sympathy with the people who have lost significant amounts of money, and that is exactly why we put the financial assistance scheme in place. We want to work with Members on both sides of the House to make sure that we can make payments as quickly as possible.

Michael Penning: rose

James Purnell: The hon. Gentleman obviously wants to intervene, and I am happy to give way.

Michael Penning: I have wanted to intervene for some time, but the Minister keeps giving way to his hon. Friends, rather than Conservative Members. Will the Minister continue to tout the figure of 15 billion, which came out of the ether, as the amount that the taxpayer would have to pay, although it is clearly wrong?

James Purnell: That figure was calculated by our economists, and we have set out exactly how it was calculated. We have also made it clear that it is the net present value, but that is the way in which the Government accounts for their spending. It was net present value that was used in the pre-Budget report yesterday, too, because that is how resources are controlled in government. The debate has made it clear that, on one point, there is no difference between us and the Oppositionwe both think that more taxpayer money should not be put into the scheme. The Opposition agree with us that we are at the limit of what taxpayers should do. We have worked hard to find extra assistance, and we have extended the scheme. In a previous speech on the subject, the hon. Member for Eastbourne (Mr. Waterson) said that
	at no stage have the official Opposition ever committed taxpayers' money to this issue above and beyond what the Government have already committed.[ Official Report, 27 June 2006; Vol. 448, c. 175.]
	We have worked hard to increase the scheme and will continue to work hard with Members of all parties on the subject. We believe that we have made a significant contribution, because we recognise the real distress and loss that people have experienced. We have listened carefully to the arguments advanced by the hon. Member for Cannock Chase and his Committee, and we will continue to keep the matter under review. We have made it clear that we will consider deemed buy-back again, and that we will keep the issue of whether there are any other sources of funding under review, but I am afraid that we have come to the conclusion that there are no other sources of funding that could make good, and provide the significant amount of money that would be requiredenough to pay for 8,000 nurses, 6,000 teachers or 3,000 doctors.
	 It being Six o'clock Madam Deputy Speaker  proceeded to put forthwith the deferred Questions relating to Estimates, pursuant to Standing Order No. 54(5) (Consideration of estimates)

SUPPLEMENTARY ESTIMATES, 2006-07

Department for Communities and Local Government
	 Resolved,
	That, for the year ending with 31st March 2007, for expenditure by the Department for Communities and Local Government
	(1) further resources, not exceeding 1,351,500,000, be authorised for use as set out in HC 2,
	(2) a further sum, not exceeding 1,357,195,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and
	(3) limits as so set out be set on appropriations in aid.  [Huw Irranca-Davies.]

Department for Work and Pensions

Resolved,
	That, for the year ending with 31st March 2007, for expenditure by the Department for Work and Pensions
	(1) further resources, not exceeding 782,539,000, be authorised for use as set out in HC 2,
	(2) a further sum, not exceeding 517,523,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs as so set out, and
	(3) limits as so set out be set on appropriations in aid.  [Huw Irranca-Davies.]
	Madam Deputy Speaker  then proceeded to put forthwith the Questions required to be put, pursuant to Standing Order No. 55 (Questions on voting of estimates, c.)

ESTIMATES, 2006-07 (NAVY) VOTE A

Resolved,
	That, during the year ending with 31st March 2007, modifications in the maximum numbers in the Reserve Naval and Marine Forces set out in HC 18 be authorised for the purposes of Part I of the Reserve Forces Act 1996. [Huw Irranca-Davies.]

SUPPLEMENTARY ESTIMATES AND NEW ESTIMATES, 2006-07

Resolved,
	That, for the year ending with 31st March 2007
	(1) further resources, not exceeding 4,150,559,000, be authorised for use for defence and civil services as set out in HC 2 and HC 7,
	(2) a further sum, not exceeding 5,956,487,000, be granted to Her Majesty out of the Consolidated Fund, to meet the costs of defence and civil services as so set out, and
	(3) limits as set out in HC 2 be set on appropriations in aid.  [Huw Irranca-Davies.]

ESTIMATES, 2007-08 (VOTE ON ACCOUNT)

Resolved,
	That, for the year ending with 31st March 2008
	(1) resources, not exceeding 181,206,923,000, be authorised, on account, for use for defence and civil services as set out in HC 4, HC 5, HC 6 and HC 19, and
	(2) a sum, not exceeding 171,368,021,000, be granted to Her Majesty out of the Consolidated Fund, on account, to meet the costs of defence and civil services as so set out. [Huw Irranca-Davies.]
	 Ordered,
	That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Stephen Timms, Dawn Primarolo and Ed Balls do prepare and bring it in.

CONSOLIDATED FUND (APPROPIATIONS) BILL

John Healey accordingly presented a Bill to authorise the use of resources for the service of the years ending with 31st March 2007 and 31st March 2008 and to apply certain sums out of the Consolidated fund to the service of the years ending with 31st March 2007 and 31st March 2008: And the same was read the First time; and ordered to be read a Second time on Monday 11 December, and to be printed [Bill 15].

DELEGATED LEGISLATION

Madam Deputy Speaker: With the leave of the House, I propose to take motions 6 to 11 together.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Corporation Tax

That the draft Taxation of Securitisation Companies Regulations 2006, which were laid before this House on 15th November, be approved.
	That the draft Oil Taxation (Market Value of Oil) Regulations 2006, which were laid before this House on 23rd November, be approved.

Petroleum Revenue Tax

That the draft Petroleum Revenue Tax (Attribution of Blended Crude Oil) Regulations 2006, which were laid before this House on 21st November, be approved.

Consumer Protection

That the draft Compensation (Claims Management Services) Regulations 2006, which were laid before this House on 16th November, be approved.
	That the draft Compensation (Specification of Benefits) Order 2006, which was laid before this House on 16th November, be approved.
	That the draft Compensation (Regulated Claims Management Services) Order 2006, which was laid before this House on 16th November, be approved .[Huw Irranca-Davies.]
	 Question agreed to.

EUROPEAN UNION DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9)(European Standing Committees),

Waste Prevention and Recycling

That this House takes note of European Union Documents No. 5047/06 and Addenda 1 and 2, Commission Communication, Taking sustainable use of resources forward: A Thematic Strategy on the prevention and recycling of waste, and No. 5050/06 and Addendum 1, Draft Directive on waste; and agrees with the Government's proposed negotiating position relating to the revision of the Waste Framework Directive. . [Huw Irranca-Davies.]
	 Question agreed to.

SECTION 5 OF THE EUROPEAN COMMUNITIES (AMENDMENT) ACT 1993

Ordered,
	That, for the purposes of its approval under section 5 of the European Communities (Amendment) Act 1993, the Government's assessment as set out in the Pre-Budget Report 2006 shall be treated as if it were an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees). [Huw Irranca-Davies.]

MODERNISATION OF THE HOUSE

Ordered,
	That Graham Stringer be discharged from the Select Committee on Modernisation of the House of Commons and Mr Iain Wright be added. [Huw Irranca-Davies.]

PETITION

Alimta

Nick Brown: I wish to present a petition collected by my constituent, Mr. John Kelly, and others. It was organised by the Tyne and Wear asbestos support group, and it concerns the availability of the drug Alimta to sufferers of the asbestos-induced lung disease, mesothelioma. Alimta is not a cure, but it extends the victim's lifein some cases more than in othersand it improves their quality of life. The House should be sympathetic to mesothelioma sufferers, because the condition is caused by industrial processes that use asbestos and is thus concentrated in industrial communities. Investment in Alimta may push back the frontiers of medical science, and Newcastle is proud to be associated with such studies. Feeling about the matter on Tyneside is so strong that the petition was signed by 3,080 local people.
	The petition states:
	The Petitioners therefore request that the House of Commons urges the Secretary of State for Health to instruct all PCTs to provide Alimta free at point of clinical need.
	And the Petitioners remain, etc.
	 To lie upon the Table.

INTERNET GAMBLING

Motion made, and Question proposed, That this House do now adjourn .[Huw Irranca-Davies.]

Ben Chapman: I am delighted to have secured this debate on internet gambling, because I think that the subject is very important. I am not a great expert on the internet, but I know of people who are involved in internet gambling and worry about the situation. I speak without having consulted such people, but I hope that they understand that I share a concern which others have expressed.
	There is an adequacy of accumulated evidence and expert opinion to suggest that the issue should be a matter of concern for a large number of people, extending to more than those who practise internet gambling. It may seem a little anachronistic to term internet gambling a vice, but if that is what it is, then that is what it isalthough gambling is not the oldest vice, it is certainly well up there.
	I do not want to be negative; I want to be positiveand we are, as they say, where we are. As I am sure that the Minister will say, internet gambling is here to stay, and, to be frank, we had better get used to it. However, I want to sound a note of caution about some things that concern me, because we are, in a sense, stepping into the unknown. I also want to put forward some thoughts about things that I think are within the Government's power to effect and regulate.
	The Government set out their position early on with regard to internet gambling and, to their credit, they have remained consistent. The House of Commons Library has said this about gambling and internet gambling:
	Gambling is not something that can be regulated out of existence whatever its dangers: traditionally, gambling regulation was based on the physical premises in which gambling took place...the internet has made such regulation impractical; in the face of such hard facts the best course of action for Britain is to permit online gambling from British-based websites in the knowledge that such gambling can be subject to British regulation and will offer security to British punters that will discourage them from trusting their luck (and money) to overseas operators.
	Few would take issue with that point of view. Indeed, the Government have been supported in their approach by the Salvation Army, the Methodist Church and GamCare, among others.
	The Government have also said, however, that they want the UK to become a centre for the online gambling industry. That aspiration has, of course, been thrown into sharp relief by the passing of anti-gaming laws in the US, which prohibit banks from accepting requests for payment from gambling websites. The industry's potential is massive. Last year, $12 billion was bet on sites around the world, which offer games such as poker, blackjack and roulette and slot machines, and 1 billion of that was staked in this country. Many operators will be looking to Britain to fill the void left by the US, and it is understandable that UK plc should seek to profit economically, but many people will be uneasy with such an aspiration.
	A study commissioned by the Department for Culture, Media and Sport found that on a conservative estimate the number of online gamblers is about 1 million people in the UK staking on average 1,000 each. A recent Panorama programme, however, contained claims from a further study suggesting that that figure is a massive underestimate. That study stated that 5.8 million peopleone in 10 people in the UKlog on to sites every month.
	For some, the situation has proved to be very profitable. Some peopleI suspect that they are a minorityhave turned professional and earned huge sums of money, but for others the results have been devastating. Citizens advice bureaux have reported some extremely disturbing cases, albeit in relatively few instances. One man gambled on the internet and lost 200, having seen a TV programme on online gambling. He became so obsessed about the need to recover that 200 that he now owes more than 50,000. Another bureau saw somebody who ran up 30,000-worth of online gambling debts in 12 months, using one credit card to pay off another. That person is applying for bankruptcy. Many people may find it hard to imagine that worthy organisations such as GamCare and the Responsibility in Gambling Trust, no matter how well funded, would have the tentacles to prevent punters from slipping into such a vortex of addiction.
	The point is that gambling on the internet is an inherently isolated pursuit, unlike gambling in the social context of a casino. Typically, those gambling on the internet will do so alone. The dangers of acting on impulse are thus increased. Dr. E. Moran from the Royal College of Psychiatrists, who has many years of experience in this field, including involvement with the establishment of Gamblers Anonymous, lists several well established psychological effects of gambling, ranging from habit forming caused by small but regular prizes to an unrealistic assessment of the player's chances of winning. Users may be unaware that they are racking up large losses, because they are given occasional wins as an incentive to keep them locked in. The availability of credit on many sites means that users lose sight of their debt, which contributes to the temptation to chase it. Extensive studies have shown that the psychological and physiological effects on those who participate in gambling encourage the chasing of losses.
	It may be said that it is a small minority who are afflicted by these conditions of self-delusion and that it is the responsibility of the gambling industry and the Government to target those people and give them help. That is true, but my fear, and that of others, is that a few years down the line we may find that what is currently a minority has grown significantly. In 2002, an inquiry in Australia found that one third of the industry's total revenue was derived from problem gamblers.
	Given that people are faced with a barrage of bright lights and flashing images offering the possibility of big winnings, it may be unhelpful to talk in terms of problem or vulnerable gamblers, because that implies that anyone else is somehow invulnerable. Reading through Government papers on the subject, one gets the impression that if only the punter had enough information they could be transported to a state of calm objectivity when deciding whether to risk each stakebut gambling can be glamorous, exciting and sometimes very fast. There is likely to be regular success, which tends to blinker the user to his or her long-term losses and encourage participation. The fact is that internet gambling is conducive to addictive behaviour. We can say at the very least that not all who take part make an informed choice all the time.
	Education and transparency are important, but are they enough? We surely need more and better restrictions on under-age children gaining access. The recent licence regulations issued by the Gambling Commission are welcome in their requirements for age verification, but there may be gaps. What can be done, for example, to stop children gambling via internet services on mobile phones? For obvious reasons, we need to take steps to ensure that phone credit cannot be used to stake money. Across the board, we need more warnings that players have spent too much money, and we need to look at restricting the amount that can be staked in any one period of time. The provision for punters to self-excludeto inform the website that they wish to be prevented from taking partis dependent on individuals recognising that they have a problem and furthermore taking steps to tackle it. Pathological gambling, as it is termed, is not so easy to tackle.
	What assurance can my right hon. Friend give me that the banks and credit card companies will be fully involved in identifying problem gamblers and that credit will not be granted so easily by the websites themselves, and in the form of credit cards? We need to support, financially and through close involvement with the regulators, all the organisations, such as GamCare, that work with those who need help. I am pleased that that appears to be forthcoming, because it is needed. The establishment of the Responsibility in Gambling Trust is also welcome, and it is good that a target of 3 million a year to fund its activities has been set. However, am I alone in thinking that having members of the industry, even in a minority, on the board, is at least questionable? Expertise is one thing, but perception of vested interest is another. It should be remembered that the organisation was originally set up by the industry and known as the Gambling Industry Charitable Trust.
	I see no reason why the partnership formed with the Economic and Social Research Council to conduct research, for example, could not have been with the Gambling Commission. By all means let us have a body charged with research and educating the public, but should not that be funded by a levy on the industry, but be separate from the industry? Surely that is the only way to ensure rigorous independenceperceived and actualand to give the public full confidence in its activities and strategy.
	Even if we accept the Government's strategy of damage limitation by means of a tightly regulated UK market, it is less easy to understand why restrictions on advertising internet gambling are to be relaxed from next year. No matter how closely the regulations are drawn up to protect children and those at risk, advertising and, to a lesser extent, sponsorship is designed to entice those who would not otherwise opt to participate, and to encourage those already involved to play more.
	I have discussed this matter with Ofcom, because I consider the distinction between sponsorship, which is currently allowed, and advertising, which is not, to be doubtful. It seems to me that, irrespective of whether a form of advertising acts as a direct incitement to purchase a product, advertising and sponsorship want the same outcomeincreased sales.
	A proliferation of companies has sponsored, for example, InterCasino with Football Tonight on Sky. Others have sponsored football teams. There is a particular worry about football. For example, I understand that one company has sponsored Aston Villa. Companies are out to maximise profits, and a big part of that is attracting new customersfrom competitors, but also from those who have never gambled. A leading academic on marketing strategies confirmed that, and said:
	By definition in this relatively new market, there will be potential customers who are not yet familiar with online gaming. Marketing off-line will seek to draw such people into this new and entertaining world and thus deliver new value to the company. Typical strategies might focus on making entry easy into online gaming.
	It is one thing to push for a set of regulations designed to lure players away from potentially unscrupulous operators, but we should not encourage greater participation. Surely banning advertising in itself would not have repercussions such as driving people underground. It remains within the powers of the UK Government to ban advertising, and they should do that.
	Certainly the Government should take immediate action against companies that have breached existing rules. Despite assurances in November last year that online gambling companies would face prosecution for flouting the law, no one has so far been prosecuted. The law continues to be widely ignored. For example, 888.com recently offered the chance of a seat at the Aussie Millions poker tournament in Melbourne for anyone who downloaded the poker software and completed stages of a free tournament.
	Earlier in the year, the same company offered free flights to anyone who opened an account. I am told that  The Independent newspaper hosts a gaming section on its website offering inducements of up to 500 to make deposits when signing up. Those are only a few examples, and even if those concerned could make a case that they were operating within the letter of the law, they are surely not operating within its spirit.
	Will my right hon. Friend give me an undertaking that the law will be rigorously enforced now, and that those who infringe it will be punished severely? Furthermore, if he will not consider a ban on advertising, does he think it appropriateeven with the enhanced protection of the new regulationsthat when the Act comes into force next year, such inducements will be legal?
	We need to be cautious about the next few years. As I said, I am fully aware that in terms of direct regulation, we will be in a much better position in September next year than we are now. It is right and proper that the Government have taken the lead in efforts to establish international standards for the regulation of online gambling, and I congratulate them on doing it. I do not think that the road that the United States has followed is the right one.
	I call on the Government to commit to doing four things in the run-up to September. They should ensure that the industry gives more warnings to players and restricts access to under-age people. They should also ensure that regular authoritative research is carried out to monitor the situation, as well as assessing the burden placed on health services, charities such as Citizens Advice, and others. They should consider whether the Gambling Trust is, and is seen to be, as independent as it should be, and they should take immediate steps against unlawful advertising, and seriously consider a ban.
	We in Britain are entering new territorya territory in which demand for gambling is being actively stimulated. Gambling online is but one form of this, but because of the internet's ease of access and increasing pervasiveness, it has the potential to be the most pernicious. I am not suggesting that there is any harm in the occasional flutter. Nor am I seeking to be a killjoy. Prohibition would be illiberal and, more to the point, impossible to enforce. But the spirit of the Gaming Act 1968 is worthy of preservation. Gambling, unlike many other regulated activities, is deserving of special consideration because of its inherent addictive properties. We should not be in the business of allowing it to be promoted unhindered.

Richard Caborn: I congratulate my hon. Friend the Member for Wirral, South (Ben Chapman) on securing this timely debate. The matters that he raises are important, and I know that they are close to his heart and to the interests that he pursues.
	Let me start by saying that I am very pleased with what we, collectivelythe Government, the Gambling Commission, the industry and others, such as the faith groupshave achieved so far, and will, I hope, continue to achieve. We are creating a modern, flexible licensing regime for a modern, innovative industry. Ours will be a new system of regulation, which will be watched widely around the world as it develops. It will be able to adapt more quickly to new developments in the industry and will involve local people and their elected representatives more closely in the regulation of gambling in their communities.
	We have given the Gambling Commission the statutory powers that it needs to tackle illegal gambling and operators who breach the rules. We have ensured that continuing to keep crime out of the British gambling industry remains central to our system of regulation, and is backed by the toughest vetting and by sanctions at the end of the process.
	I agree entirely with what my hon. Friend said about the Gaming Act 1968, which was put on to the statute book to drive crime out of gambling. It was probably one of the most draconian pieces of legislation on the statute book, and it has worked very effectively. Indeed, it has given the industry the integrity for which it is known around the world and the basic principles that we have tried to bring into the Gambling Act 2005 and the new regime. Most importantly, we have placed the protection of children and vulnerable people at the heart of gambling regulation for the first time. Provisions such as those were not in the 1968 Act. New commercial freedoms for industry are balanced by new obligations to ensure that children and other vulnerable people are protected. This balancing of new rights and new social responsibility obligations is absolutely central to the success of the new Act.
	It is worth reminding ourselves precisely why we need the new Gambling Act. Controls on commercial gambling are being undermined by new technology. This means that we are finding it difficult to protect children and vulnerable people from risky new products and from new methods of delivering those products, such as the internet. The Gambling Act restores control by means of a strong, flexible, adaptable licensing regime, which has social responsibility as the key underlying principle. Other countries, such as the USA, have taken a different approach from ours, especially on remote gambling. But our viewwith which Professor Budd, Parliament, problem gambling experts and most academics agreeis that strong regulation, not prohibition, is the best means we have of protecting children and vulnerable people from the harmful effects of gambling.
	We will be able to employ a range of measures designed to permit the socially responsible to promote and offer their gambling activities in a socially responsible way. In fact, social responsibility will be an explicit licence condition, with breaches triggering serious penalties including unlimited fines or even loss of licences. As I have said, protecting the publicespecially children and the vulnerableremains our top priority. I am confident that the measures in the Act will protect children and vulnerable adults, but the Gambling Commission will be able to impose additional measures on operators to provide further protection if it is needed.
	We do not know whether more people will choose to gamble, but I believe that if they do, they will be far better protected than they would have been under the old Act. The industry has established the Responsibility in Gambling trust, which my hon. Friend mentioned, to fund prevention and treatment of problem gamblers. We have set a target of some 3 million a year to apply once the Act is fully implemented, from September next year. The trust is working very hard to achieve that target, but if more is needed and is not delivered by the industry, the Act allows the imposition of a statutory levy. We will use those powers if necessary. We want to see the industry make its due contribution to this critical arm of the arrangements. We can apply the powers to the Gambling Commission as well.
	We are allowing the expansion of gambling opportunities only because we are also introducing effective measures to deal with the risk. We will keep a close eye on levels of problem gambling. If evidence tells us that we need to get tougher to protect the public, we will do so. The Government recognise that remote gambling poses new potential risks, which my hon. Friend described. The problem that we have faced and choose to address is that existing legislation does not deal adequately with the internet and remote gambling. We believe that strong regulation is the best means of protection for consumers. Operators in Britain will have to comply with a specific remote gambling licence. Licences will contain tough conditions to protect vulnerable users, and will prevent children from gaining access to sites.
	As I said earlier, the British gambling industry enjoys a well-respected international reputation for integrity and high social-responsibility standards. Strong regulation in the new growth areas will further enhance our reputation, and allow British operators to lead the global online market. Regardless of whether remote operators choose to base their businesses here, we retain a keen interest in how those businesses' gambling activities are promoted and advertised to British citizens.
	Legitimate gambling businesses based in jurisdictions with robust consumer protection regimes should be allowed to advertise in great Britain. It will be an offence to advertise illegal gambling, but the Advertising Standards Authority has been working with the Gambling Commission to draw up a new code for non-broadcast gambling advertising in the light of the Gambling Act 2005, and has been consulting widely. The Secretary of State also has reserve powers under the Act to make regulations on the form, content, timing and location of gambling advertising. We will not hesitate to use those powers if it becomes clear that self-regulation is not sufficient to protect children and vulnerable people from exploitation.
	My hon. Friend referred to an event that took place a few weeks ago. While it is not strictly accurate to say that we have no control over remote gambling operators based overseas, we recognise that regulating remote gambling is a global challenge. That is why we held the first-ever international Government summit on remote gambling in the United Kingdom on 31 October this year. We brought together more than 30 jurisdictions from around the world with an interest in regulating for remote gambling with a view to exploring the scope for developing minimum international standards for such regulation, particularly in relation to social responsibility and age verification. I believe that we made excellent progress, and that we now have a road map that will lead to better regulation of remote gambling throughout the world.
	Those present at the summit agreed to co-operate further in a number of key areas to ensure that gambling remains fair and crime-free and that vulnerable people are protected. We discussed the text of the draft communiqu in detail. Delegates have taken it back to their respective Governments, and written confirmation will be sought in the coming weeks.
	We also agreed at the summit to follow up with proposals for an expert working group representative of those countries present. We will want to involve wider international institutions, including UNESCO and the global financial sector, in advising on the development of worldwide standards for regulation. I hope that that group will report back in the middle of next year. The co-operation that we received from credit card companies was also pleasing, as that is essential if we are to regulate internet gambling effectively.
	My hon. Friend referred to the Responsibility in Gambling Trust and asked whether members of the industry should be a party to that. I think it is right that they should. Sir Alan Budd recommended that they should be on it. We need to expose the industry to the arguments of those who are from a different constituency but equally concerned about gambling and vice versa. Members of the Methodist Church are also on the Gambling Commission. That is right. It does not tarnish the Methodist Church or the Salvation Army to be involved in regulation or to be on the commission or the trust. It is a two-way street, and we must bring together responsible people from all sectors, including the industry, those affected by it and those who have justifiable criticisms. If we can bring those parties together, the trust will operate better, and the Gambling Commission will regulate better.
	On advertising, my hon. Friend's position was clear. He outlined the role of Ofcom and the Advertising Standards Authority, as well as that of the Gambling Commission, and I assure him that the regulations will be applied very firmly. He referred to gambling operators' sponsorship of sport, particularly football. He is right to do so, as there are concerns about advertising on football shirts and sponsorship of football clubs by gambling companies. The Gambling Commission will consult on the issue early in the new year, with my full support. As the Minister for Sport as well as the Minister with responsibility for gambling, I think that we need to take a responsible attitude to that.
	We are developing a white list of those territories outside the European economic area and Gibraltar, which can advertise in the United Kingdom unless a specific exemption has been made. Countries will have to demonstrate that they have a strict regime before they can register on that white list and thereby have the opportunity to advertise in the UK.
	Five years ago, we asked Sir Alan Budd to look at internet and remote gambling because Parliament and the Government did not have the powers to intervene to protect the vulnerable. It was right that we did that and we have had, effectively, a five-year debate to bring an Act to the statute book. The Act takes the basic principles of the 1968 Act and puts them into a modern setting. It mentions many of the issues that are of concern to the British public, including the protection of the vulnerable and of children, which is in legislation for the first time.
	I give my clear assurance that the Government will carry out the Act's proposals to the letter if we need to intervene to protect the vulnerable in our society. The way in which the industry developed and operated under the 1968 Act gave it international credibility and integrity and we want that to continue. It is an important part of our leisure industry. This country has probably the best regulatory regimes in finance, the law and in business, and companies that come to be registered and licensed in this country will do so under a very credible regime.
	If we can marry those elements together we can have an industry that is socially responsible and which can play a legitimate part in our leisure industry, while accepting that we have to protect the vulnerable in society
	 The motion having been made after Six o'clock, and the debate having continued for half an hour, Madam Deputy Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at twenty-five minutes to Seven o'clock.